Draft filing by food delivery chain Zomato ushers the new era for the Indian tech unicorns in the second largest internet market in the world.
Zomato has lodged a draft red herring prospectus with SEBI to launch an IPO offering in the Indian market. Since the beginning of 2021, there were many speculations regarding India’s tech unicorns launching their IPO during the year. Confirming the news, Zomato has filed to go public with a massive IPO offer.
Zomato is a restaurant aggregator and food delivery company founded in 2008 in New Delhi. It’s among India’s most successful tech startup, with current employee strength of 5000. Zomato is a household name in India and twenty-four other markets like Sri Lanka, South Africa, and Slovakia, covering over 10,000 cities. In January, Zomato made headlines by acquiring UberEats in India and letting all restaurants on the UberEats platform gradually move to their app-based service. It was last valued at USD 5.4 billion by CB Insights after a round of fundraising.
Along with its peer, Swiggy, Zomato dominates the Indian food delivery market.
Zomato IPO will be the largest in India’s IPO history
The company on Wednesday filed a draft red herring prospectus with the market regulator, seeking approval for a USD 1.1 billion IPO. According to the report, the issue contains Rs 7,500 crores of the primary component and Rs 750 crore in offer for sale from its largest stakeholder, Edge India Ltd. Edge India holds an 18.5 percent stake in the business.
Recently the company appointed five independent directors to its eight-member strong board, and the new board has approved the proposal of Zomato IPO.
Ahead of the IPO, Zomato in February raised USD 2.2 billion in funding from global hedge funds like Tiger Global, Kora and others, taking the aggregated market value to USD 5.4 billion.
Zomato IPO news is undoubtedly big for the Indian market, and a lot depends on its successful listing. Nearly a dozen Indian startup unicorns poised to list in the exchange. Zomato’s effective listing will give steam to their effort to tap the public market.
A lot of Indian startups have locked funding from leading international funding agencies like Softbank. But so far, they were reluctant to test the public market. However, recent successful listings of a few tech companies like Nazara have shown that Indian investors have a strong appetite for tech stocks and are considerate to new-age businesses.