A password will be e-mailed to you.

What does Harsh Goenka’s snappy remark on Zomato mean?

Harsh Goenka who is the chairman of RPG Enterprises, took a jibe at Zomato’s IPO success on Saturday, claiming he is planning to launch an app similar to Zomato or its competitor Swiggy which will offer food at a whooping 40% discount with a loss of “only” Rs 3,000 crore.

Goenka, who uses Twitter frequently, remarked on the social media site that if people believe the loss is less, he is willing to offer a 60% discount. Then he’ll list it at Rs 1 lakh crore.


The Rs 9,375-crore Zomato initial public offering (IPO) was a huge success, with the issue being subscribed 38.25 times. It got offers for 2,751.25 crore equity shares, compared to 71.92 crore equity shares in the IPO.

Retail investors received 7.45 times their reserved amount, while non-institutional investors received 32.96 times their reserved portion. Employees received 62 percent of the allocation, while qualified institutional buyers (QIBs) received 51.79 percent.

What’s the issue?

While many observers have hailed Zomato’s successful IPO as a watershed moment for the Indian startup environment, not everyone agrees. Many analysts have questioned the company’s valuations, believing that its road to profitability is unclear.

Zomato is a loss-making business in terms of finances. In fiscal 2021, the company lost Rs 816.42 crore, Rs 2,385.60 crore in fiscal 2020, and Rs 1,010.51 crore in fiscal 2019.

Given Zomato’s fast development over the previous several years, the IPO has already generated a lot of interest among institutional and retail investors. However, because Zomato is still losing money on a net basis, a segment of the market is concerned about values.

Zomato’s IPO

The IPO went public on July 14 with a price range of 72-76 per share. It was shut down on Friday.

On July 13, a day before the offer of IPO launched, Zomato had already raised Rs 4,196.51 crore from 186 anchor investors. The IPO’s size has been lowered from 9,375 crore to 5,178.49 crore.

Zomato logo on a Smartphone; Abstract office Buildings and Trading Screen Data

Image Source: Zomato via Getty Images

The business, which is funded by Jack Ma’s Ant Group Co, is the first of several Indian unicorn companies to go public. It is also India’s first online food aggregator.

Zomato was founded in 2008 and now has a presence in vast 525 cities across India, with almost 4 lakha active restaurant listings, as well as 23 countries outside of India.

More IPOs coming

In the Indian market recently, there has been a rush of IPOs, with several new-age firms aiming to go public. While Paytm is seeking an IPO this year, Mobikwik, a digital payment company, has filed draught documents with SEBI for an IPO of Rs 1,900 crore.

In 2020-21, Paytm lost Rs 1,704 crore, Rs 2,943 crore in 2019-20, and Rs 4,235 crore in 2018-19. Not everyone is enthusiastic about Indian consumer tech firms’ aspirations to list on stock markets, especially since many of them are losing money.



No more articles
Send this to a friend