Zomato IPO to open from July 14 to 16; Price band ₹72-76 per share

Food delivery giant Zomato on July 8 fixed a price band at Rs 72-76 per equity share for its IPO. Reports have suggested that the Rs 9,375-crore offer will open for subscription on July 14 and close on July 16. Anchor book, if any, will open for a day on July 13, a day before the issue opening. Zomato IPO is the largest after SBI Card IPO in March 2020. The latter valued at Rs 10,355 crore.

The public offer comprises fresh issuance of Rs 9,000 crore, and an offer for sale from InfoEdge of Rs 375 crore. The public issue also includes a reservation of up to 65 lakh equity shares for its employees. Investors can apply for a minimum of 195 equity shares and in multiples of 195 shares thereafter. Zomato has also reserved up to 75% of the total offer for qualified institutional buyers; up to 10% for retail investors, and the rest 15% for non-institutional buyers.

Here are the things to know about the Zomato IPO:

CEO Deepinder Goyal announced the IPO in September 2020. In an email to the employees, Goyal wrote, “Our finance/legal teams are working hard to take us to IPO sometime in the first half of next year. We hope to create a lot of value for our current employees who have ESOPs sometime in the next year.”

Now, Zomato IPO opens on July 14 and will close by July 16. The bulk of this will be new shares priced at ₹72 to ₹76 each. Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities, BofA Securities and Citigroup Global are managing the sale. The IPO will be a boon for Ant Group. The reason - it made early investments in two companies going for IPO this year - Zomato and Paytm.

Info Edge, one of Zomato’s early investors, will sell its shares worth Rs 375 crore through the IPO, the number was rs 750 crores when Zomato filed its DHRP. Zomato also stated that it will offer Info Edge to nominate one non-executive nominee director, liable to retire by rotation, on the Board till their respective shareholding is >7.5% of the shares of the company. Info Edge currently owns around 18.5% of the company, a stake worth Rs 7,270 crore.

The company, in its DHRP, said that it would use 75% of the IPO money to fund organic and inorganic growth initiatives for five years. The IPO fund use will span out in customer acquisition, delivery and technology infrastructure, potential acquisitions and strategic initiatives.