Investors are eagerly awaiting India’s first starter unicorn listing, whose share allocation is likely to end on Thursday. The stock market will close on Wednesday on behalf of Bakri Id.
Last heard from, Zomato’s unlisted shares had a premium of Rs 16.75-17.25 on the gray market against Rs 10 they had just prior to issuance. Most brokerages expect the issue to generate strong trading gains, although many have a mixed outlook on the stock’s performance over the medium term, as the issue was deemed overvalued based on various valuation parameters.
The Rs 9,375 crore issue, which was sold in the Rs 72-Rs 76 price band, received a strong response from investors, with a total of subscriptions exceeding 38 times. The quota reserved for qualified institutional buyers (QIB) was subscribed 54.71 times, while that reserved for non-institutional investors (NII) 34.80 times. The retail share was subscribed 7.87 times.
At issue price, the company will have a market capitalization of approximately Rs 64,500 crore., Which will be higher than the combined market value of the half-dozen quick-service restaurant chains listed in India, such as franchises of Domino’s, McDonald’s and Burger. King, among others.
Indian has 20 publicly traded hotel companies with an aggregate market capitalization of approximately Rs 45 billion.
Investors who have bid on the issue can check the status of the Zomato share allocation on the Bombay Stock Exchange (BSE) website:
- Visit https://www.bseindia.com/investors/appli_check.aspx
- Under Issue Type, click Equity
- Under the name of the problem, select Zomato Limited from the drop-down box.
- Write the application number
- Add PAN card ID
- Click ‘I’m not a robot and hit submit.
The status of the share allocation can also be checked on the online portal of Link Intime India Private Limited (https://linkintime.co.in/MIPO/Ipoallotment.html), the issuer’s registrar. The registrar is a registered entity with Sebi, qualified to act as such and that electronically processes all applications and carries out the adjudication process according to the prospectus.
The registrar is responsible for meeting deadlines for updating the electronic credit of shares to selected applicants, submitting and uploading redemptions, and handling all investor-related inquiries upon completion of issuance.
- Go to Link Intime India Private Limited web portal
- Select the initial public offering on Dropbox whose name will be populated only if the assignment is completed
- You may need to select one of three modes: Request Number, Client ID, or PAN ID
- In the application type, select between ASBA and non-ASBA
- Enter the details of the mode you selected in Step 2
- For security reasons, please fill in the captcha accurately
- Hit send.
Bidders who were unable to secure the share allocation in the IPO can see the redemptions initialization on Friday. Others, who would be assigned shares, can see the share credit in their arrears accounts on Monday of next week. The shares are likely to trade next Tuesday.
In his IPO note, Prabhudas Lilladher said that he believes Zomato will be a losing company for the next 2-3 years, but expects premium valuations to hold up given that the online business in India is on the cusp of a rapid growth in the coming years.
KR Choksey was not comfortable with the ‘sky-high’ valuation of the IPO, but recommended ‘subscribing’ to the issue just to quote earnings. ‘ Zomato cut its losses to Rs 816.42 crore in FY21 from Rs 2,386 crore in FY20. It reported a loss of Rs 1,010 crore in FY19. Zomato in its RHP said that it expects costs to increase over time and “our losses will continue, given the significant investments that are expected to grow our business.”