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Zomato IPO Grey Market Premium, Allotment Status, Listing Day: Key Details to Know

Zomato is most likely looking at an allotment date of July 22 and a listing date of July 27. (Representative Image)

Zomato is most likely looking at an allotment date of July 22 and a listing date of July 27. (Representative Image)

Zomato's net proceeds of around Rs 6,750 crore from its IPO will go towards funding both organic and inorganic growth initiatives.

After the food delivery giant, Zomato closed its historic and successful initial public offering (IPO) last week on July 16, it has finalised its IPO share allotment. The public issue received a great deal of demand and response last week, as investors oversubscribing a total of 38.25 times from its opening day on July 14, till its close date. The qualified institutional buyers (QIBs) subscribed 51.79 times against their allotted bid, while non-institutional investors (NIIs) subscribed 32.96 times over the period that the IPO was open to the market. The retail investor’s portion was subscribed 7.45 times during that time frame. With a price band of Rs 72 to Rs 76, the IPO made a statement when it hit the open market and was nearly fully subscribed on opening day.

The size of the IPO was brought down from the initial Rs 9,375 crore to Rs 5,178.49 crore. Investors had put in around Rs 2 lakh crore worth of bids for the issue, as well as a Rs 1.5 lakh crore of bids by the QIBs. The company had raised a total of Rs 4,195 crore from its 186 anchor investors on July 13, a day prior to the offer hitting the open market. Zomato will be using the net proceeds from its IPO to fund both organic and inorganic growth initiatives. This allocated funding amount is around Rs 6,750 crore.

Zomato’s Grey Market Premium (GMP), today, is trading at shares of Rs 15 as per data available on IPO Watch. This leads to a price of Rs 91, which is 19.7 per cent over the upper band of the issue’s equity share price of Rs 76 per equity share.

After this massive public issue, the share allotment that is to be finalised by the company is expected around July 22 by eagle-eyed investors. The share allotment dates and information will be updated and available on the BSE or IPO registrar website when it comes out. In the meantime, the company is also looking at a potential listing day of July 27, which is yet to be confirmed.

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Following the finalisation of the allotment, ineligible investors will see their money returned to them by July 23. For eligible investors, however, the equity share will be credited to their Demat accounts by July 26. Trading of the equity shares will then commence on the following day.

Over the years, Zomato has gained a notable scale with its revenue which hit a mark of 62 per cent CAGR over FY18-FY21. The company did however continue to also incur losses during this period as per a Reliance Securities note. The company has put in significant effort and invested heavily in advertising and promotional activities to pull in more customers and partner with restaurants on its platform. Out of the two board categories of its Business-to-Consumer (B2C) offerings, the food delivery service wing is by far the largest as it drives in an approximate 75 per cent of the company’s revenue said the note.

Akshant Goyal, chief financial officer, Zomato Ltd, said in a press conference, “The proceeds will be used for newer customer acquisition, growing the delivery infrastructure and technology platform and the organic growth of the business. The second will be used for inorganic initiatives, which will include minority share purchases or full buyouts. If we come across opportunities that are strategic to our business and make sense, we will use the cash to make those investments. Thirdly the third bucket is general corporate purposes where we will be investing up to 25% of proceeds."

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first published:July 19, 2021, 11:00 IST