Zomato, the online food-delivery giant, saw a massive surge of applications on the opening day of its IPO. On Day-2 of the IPO, it was oversubscribed. The IPO was subscribed by nearly 20 per cent. Zomato IPO has been subscribed 1.07 times on July 15 so far on the second day of bidding. The offer has received bids for 77.27 crore equity shares against IPO size of 71.92 crore equity shares, according to the exchange data. The retail portion of the IPO was subscribed nearly 100 per cent within the first few hours of opening. Retail investors were bidding 2.7 times the number of shares allotted for them. The offer received bids for 75.60 crore equity shares against an IPO size of 71.92 crore, stock exchange data revealed. This comes a day after the company raised Rs 4,195 crore from 186 anchor investors on July 13. Another thing to be noted about this historical IPO is that, despite it being one of the biggest IPOs to date this year, the size of the IPO has been reduced. What was initially an IPO size of Rs 9,375 crore, has been reduced to Rs 5,178.49 crore.
The food delivery giant is looking at a tentative listing date that is most likely on July 27. On the other hand, the allotment status of Zomato IPO is expected to be available on July 22, according to reports. Within hours of its public issue opening on July 14, the retail segment of the share sale had been fully subscribed. This was at the upper end of the price band of Rs 72 to Rs 76 that was demarcated for the public issue.
The IPO had drawn retail bids worth roughly Rs 2,655 crore said the report. A total of 34.88 crore shares were bid by 1700 hours. This was against the existing 12.95 crore shares reserved for retail individual investors. Additionally, Non-institutional investors placed bids for 13 per cent against the reserved portions while 38.88 crore shares reserved for Qualified Institutional Buyers (QIBs) were nearly subscribed completely. A total of 36.84 crore shares were sought by Foreign Institutional Investors (FIIs). In total, the issue got subscribed almost 1.05 times on Day-1 of the issue opening.
Currently, the trading premium for Zomato’s IPO shares have nearly halved in the grey market on July 14, when the public issue went live for the food-delivery platform, and subscriptions opened up. The reason for this trend could be attributed to its expensive valuation compared to global peers as well as the company’s loss-making status, experts said. Shares had been trading at a premium of Rs 9 to Rs 10 on the grey market. This is at Rs 85-86 against the issued price of Rs 76, which is the upper end of the price band for the IPO, data from IPO Watch and IPO Central indicated.
Zomato had stated earlier that it had raised Rs 4,196 crore from several prominent institutional investors as part of the anchor book allocation. The company allocated 522.17 million equity shares to anchor investors at the upper limit of the price band, which was Rs 76 per equity share as per exchange filing data.
Zomato’s IPO is touted as one of the largest IPOs to date that has taken place this year. The IPO will give Zomato an estimated valuation of Rs 64,365 crore. It is second only to SBI Cards and Payment Services’ Rs 10,341 crore issue in March 2020. It is set to surpass Indian Railway Finance Corp offering in January.