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Zomato raises Rs 4,196 cr from anchor investors in Pre-IPO Round

Zomato, the online food delivery platform, has raised Rs 4,196 crore from 186 major investors only days before its initial public offering (IPO). Zomato aims to raise Rs 9,375 crore in the IPO (including anchor investments), which would include a fresh issuance and an offer for sale by current investors. The anchor investor portion has attracted prominent investors such as Tiger Global Investment Fund, Blackrock Global Funds, Fidelity Funds, JP Morgan, Morgan Stanley, T. Rowe Price, SBI, Kotak funds, Government of Singapore, Goldman Sachs, ICICI, HDFC, and UTI MF.

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

Image Source: Zomato via Getty Images

The Gurugram based company informed stock exchanges that it had issued 552,173,505 equity shares to investors through the anchor book portion at Rs 76 per equity share price. This amounts to 44.7 per cent of the IPO’s total issue size. Some of the major investors of Zomato include New World Fund, Tiger Global Investment Fund, Fidelity Funds, Baillie Gifford Pacific Fund, Morgan Stanley, and Canada Pension Plan Investment Board, who each own more than 2% of the company.

The food aggregator has allocated 184,104,960 shares to 19 domestic funds in the anchor portion, representing 33% of the overall anchor book. Some of the top domestic investors who have obtained equity share through the anchor book portion include SBI Blue Chip Fund, Axis Mutual Fund, Aditya Birla Sun Life, Kotak Flexicap Fund, Mirae Asset Large Cap Fund, and HDFC. At the same time, firms managing the IPO are Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Group AG, BofA Securities, and Citigroup Inc.

The startup’s IPO is expected to be the largest in India, amounting to around $1.3 billion after SBI Cards & Payment Services Ltd. offered $1.4 billion worth of shares in March 2020. Nevertheless, digital payments services provider Paytm, which is aiming for a more than $2 billion IPO, may soon break Zomato’s record.

According to experts and stock brokerages firms, experts and brokerages advised high-risk traders to participate in the IPO for listing advantage or for short-term profits. Since it is the first of its kind to list on the Indian stock exchanges, the IPO has generated a lot of attention and excitement in the market, which is expected to lift prices on the day of the listing.

According to the National Stock Exchange figures, Zomato’s share sale was 36 percent subscribed by 1:15 p.m. during the first day of the offering. The equities were in compelling demand between individual investors, and the portion set aside for them was immediately oversubscribed. However, demand from qualified institutional investors and non-institutional traders was moderate for the IPO.

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