Zomato’s market capitalization crosses the ₹1 lakh crore mark. It made history by being the first unicorn startup to be listed in the stock market. Its shares can now be bought.
What is a unicorn startup?
If a company’s evaluation crosses $1 Billion, it is called a unicorn startup. India has experienced many startups in the last decade but Zomato is the first unicorn startup to be listed in the stock market.
Zomato’s shareholders who had applied for IPO are now availing the benefits as the profit is more than 50%.
What is an IPO?
When a private company sets off itself to the public by selling stocks for the first time, the process is termed as Initial Public Offering (IPO). The shares can be owned by the general public in exchange for money for the company. If the company decides to sell more of its shares later, it is called Follow-on Public Offering.
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A share’s issue price was ₹76 but it got listed at a higher price, i.e, at ₹115 on Bombay Stock Exchange (BSE). On the National Stock Exchange (NSE), it got listed at ₹116. A benefit of around 50% could be seen.
Since the company’s worth is more than $1 Trillion now, Zomato made its way to the elite club of Top 100 listed companies. The evaluation of these companies is pretty high. Companies like HDFC, Reliance are present on the list.
At ₹76, before listing, the market cap would have been at ₹65,000 crores. The total number of shares was 855 crore. Now, at ₹115, it has crossed ₹1 lakh crore.
Shareholders of Zomato:
- Info Edge: 18.7%
- Uber B. V.: 9.2%
- Alipay Singapore: 8.4%
- Antfin Singapore: 8.3%
- Internet Fund VI: 6.0%
- SC1 Growth Investments II: 6.0%
- Deepinder Goyal: 5.6%
- Others: 37.9%
The IPO was issued for ₹9375 crores but the bids received were for ₹2.13 lakh crore worth of shares. In India’s capital history, this is the third-highest. Applications received were 38% more than expected.
Since the demand was higher than the supply, analysts expected the profit to be around 25-30% during listing but it turned out to be more than 50%.
Zomato was founded in 2008 and the company focuses on food delivery from various restaurants to anticipating customers. It has 3.21 crore monthly active users. The company can be seen active in 525 cities with 389,932 restaurants. It has more than 1.6 lakh delivery partners. The company has established itself in 23 countries.
It has around 62% annual growth from FY18 to FY21 but being a startup it has been facing losses.
Inspired by Zomato, many other digital companies will try to make their way into market listings. It will give a boost to budding startups through the Startup India Movement. Some digital companies like Paytm, Policybazaar, Mobikwik have followed Zomato’s footsteps by filing for IPOs.
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