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Zomato IPO: New-Age Investors Making Waves; Over 60% of Applicants Under 30 Years

Zomato's IPO size was reduced from Rs 9,375 crore to Rs 5,178 crore

Zomato's IPO size was reduced from Rs 9,375 crore to Rs 5,178 crore

In a press release, Paytm Money said that it has received a strong response from young and new-to-market investors for the Zomato IPO - 27% were under 25.

The online food-delivery giant, Zomato, saw a massive surge in young and first-time investors after the launch of its initial public offer (IPO), on July 14. The IPO which is set to close on July 16, has seen a big demand uptake from the younger generations said Paytm Money in a release. To showcase this massive uptick, historically only around 55 per cent of IPO applicants on the Paytm Money platform have been under the age of 30. As it stands now 60 per cent of Day-1 Zomato IPO applicants are under the age of 30. This figure sits on top of a further 27 per cent of Day-1 Zomato IPO applicants, who are under 25-years-old. It should also be noted that 10 per cent of the overall applications on Day-1 of the IPO were by women. They had a marginally higher ticket size as opposed to the men. The historical Zomato IPO is making waves as its average investment on the first day was 20 per cent higher than the average investment in previous IPOs on the Paytm Money platform.

Paytm Money, which is the wealth management division of the fintech giant, Paytm, announced the launch of a feature that allows users to apply for the IPOs a few days before the actual opening date. The feature was dubbed the “Pre-open IPO Application” This was introduced to increase the retail users’ participation in the IPO. Zomato was the first IPO on Paytm Money to make use of this feature. In order to further drive up user involvement Paytm Money also came out with several other features such as one-click IPO applications, IPO application via shareholder category, and tracking of live IPO subscription numbers.

Another trend that took the Zomato IPO by storm was the participation of smaller cities and towns. While investors from major metros such as Mumbai and Delhi readily took part in the IPO, smaller localities also participated. Towns like Kodinar in Gujarat, Tuensang in Nagaland, and Rangapara in Assam took part in this historical IPO.

On the opening day, Zomato’s IPO was oversubscribed. Retail investors were bidding for 2.7 times the number of shares reserved for them. The offer received bids for Rs 75.60 crore equity shares against an IPO size of Rs 71.92 crore, as per stock exchange data, revealed a PTI release.

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At the same time, retail investors were seeking 2.69 times the portion reserved for them. This was against the Rs 12.95 crore shares reserved for retail individual investors. The IPO saw Rs 34.88 crore shares bid by 1700 hours as per the release. Non-institutional investors put in bids for 13 per cent against their reserved portion. Parallelly, Rs 38.88 crore shares which were reserved for qualified institutional buyers (QIBs), were almost fully subscribed. It should be noted that Rs 36.84 crores of shares were sought by foreign institutional investors (FIIs).

Employees also had a portion set aside for them. It was subscribed at 18 per cent.

Till today, this IPO stands as the biggest in the market this year. It is open till Friday with a price band of Rs 72 to Rs 76 per equity share. Whereas the initial speculated IPO size was Rs 9,375 crore, it has since been reduced to Rs 5,178 crore. A day prior to the issue making landfall, Zomato had already mobilised Rs 4,196.51 crore from 186 anchor investors, on July 13.

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first published:July 15, 2021, 09:31 IST