Zomato Ltd. IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	ZOMATO LIMITED
Rs.72-Rs.76per Equity share	Recommendation: Subscribe

Company Profile: –

Zomato is a restaurant aggregator and food Delivery company having two core business-to-customer (B2C) offerings (i) Food delivery and (ii) Dining-out. In Addition to B2C offering it also operate a one-stop procurement solution, Hyperpure, which supplies high quality ingredients and kitchen products to restaurant partners. On an average, 1.07 crore customers ordered food every month on Zomato platform in India in FY20 with an average monthly frequency of over three times. As of December 31, 2020, there were 350,174 Active Restaurant Listings on Zomato platform in India. On an average it had 131,233 Active Food Delivery Restaurants every month in FY20. Apart from it, it had 161,637 Active Delivery Partners during the month of December 2020. Its dining-out offerings helps customers to search and discover restaurants, book a table and make payments while Dining-out at restaurants. It started Hyperpure in 2019 which is growing rapidly. In the month of December 2020, it supplied ingredients and kitchen products to over 6,000 restaurant partners across six cities in India. It has experienced rapid growth in food delivery in India with orders increasing by 13.2 times from 30.6 million in FY18 to 403.1 million in FY20. The Company saw a significant impact on its food delivery business in India in first quarter of FY21 due to COVID-19 pandemic which hit its GOV (Gross Order value) lowest in two financial years. However, since then, its food delivery business has recovered strongly with the GOV in the third quarter of FY21 was Rs. 2981 Crore which was the highest GOV that it had achieved in any quarter till December 2020.

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Issue Details
Objects of the issue	·          Toexpand the business via inorganically and organically ·          To meet General corporate Purpose
Issue Size	Issue Size – Rs.9,375 Crore Fresh Issue- Rs.9000 Crore Offer for Sale-Rs.375 Crore
Face value	Rs.1 Per Equity Share
Issue Price	Rs. 72– Rs. 76
Bid Lot	195 shares
Listing at	BSE, NSE
Issue Opens:	14thJuly 2021 – 16thJuly 2021
QIB	75% of Net Issue Offer
Retail	10% of Net Issue Offer
NIB	15% of Net Issue Offer

Positive outlook of the Firm:

• End-to-end Food Services approach makes it the most unique Food Services platform
• Operate one of India’s largest hyperlocal delivery networks, based on number of delivery partners
• Zomato is a strong consumer brand recognized across the length and breadth of India
• Have a Technology and product-first approach to business

Objective of the Issue:

• Funding organic and inorganic growth initiatives
• General corporate purposes.

Promoters of the company:

• Company is a professionally managed company and does not have an identifiable promoter in terms of the SEBI ICDR Regulations and the Companies Act.

 

Financial Performance:

 

Particulars (in Rs. Cr.)	As at/ for the year ended December 31, 2020	As at/ for the year ended March 31, 2020	As at/ for the year ended March 31, 2019	As at/ for the year ended March 31, 2018
Total assets	6988	2900	3413	1374
Total revenue	1301	2604	1313	466
Net Loss	682	2386	1010	107
Net cash inflow/ (outflows)	83	(49)	113	51

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Non-Promoters &Non-Public	4.2%	3.57%
Public	95.8%	96.43%

Source: RHP,,EWL Research,

Strengths:

• Focused on Reduction of Cost and improved growth.
• Well Recognized Brand.
• Fast Delivery and Hyper-local Network for Delivery.

Key Highlights: 

• Total Income in FY21 Stood at Rs. 2118 crore as compared to Rs.2743 crore in FY20 witnessing the negative growth of -22.76% Y-o-Y but it has witnessed a CAGR growth of 23% from FY19 to FY21.
• Adjusted EBITDA in FY21 stood at Rs. -325 Crore vs Rs. -2206 Crore in FY20.
• In Q4FY21, Gross Order value (GOV) stood at Rs.3313 Crore witnessing 11% growth Q-o-Q and 23% Y-o-Y.
• Advertisement and Sale promotion expenses in FY19, FY20, FY21 stood at 88.43%, 48.80% and 24.88% as a % of sales.
• In FY21, Unit Economics per unit Stood at Rs.20.5 as compared to Rs. -30.5 in FY20.
• NAV per Equity Share Stood at Rs.15.09 as of 31^st March,2021.

Risk Factors:

• Company has a history of Net losses and it Could continue in the future If covid situation get to worsen in the future.
• Company business could severely affected if it unable to retain its Restaurant Partners, Delivery Partners in a cost-Efficient manner.

Outlook:

Zomato is a consumer centric Food service platform company focused on providing services like Food Delivery, Dining out, B2B Supplies and Premium Customer service like Zomato pro.Company saw a significant impact on its food delivery business in India in first quarter of FY21 due to COVID-19 pandemic which hit its GOV (Gross Order value) lowest in two financial years. However, since then, its food delivery business has recovered strongly with the GOV in the fourth quarter of FY21 was Rs. 3313 Crore which was the highest GOV that it had achieved in any quarter till march 2021.Company witness strong cost control, improving GOV and Net Positive Economic Unit that shows strengthen in the company. After Covid-era the digitization in the country was game changer as it increases consumption of Internet and Switching from Traditional phone to smartphone will become new normal. As of 2020,Indian online food delivery market penetration stood at 8%-9% and online food delivery users are 8% this shows there is a more ample of headroom to grow for Zomatoand as the internet penetration and smartphone penetrationtaking pace rapidly worldwide the TAMS(Total Addressable Market Size) for Zomato will be another advantage in the future. Thus, We advise for listing gains, howeverless risk averse investor cansubscribe an IPO for the long term considering the future prospect of the company.

Lead Manager Details

1) Kotak Mahindra Capital Company Limited

1st Floor, 27 BKC, Plot No. C – 27, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051

Tel: +91 22 4336 0000

E-mail: zomato.ipo@kotak.com

Investor Grievance e-mail: kmccredressal@kotak.com

Website: www.investmentbank.kotak.com

SEBI Registration No.: INM000008704

 

 

2) Morgan Stanley India Company Private Limited

18th Floor, Tower 2, One World Centre, Plot -841, Jupiter Textile Mill Compound, Senapati Bapat Marg Lower Parel, Mumbai 400 013

Tel: +91 22 6118 1000

E-mail: zomatoipo@morganstanley.com

Investor Grievance e-mail: investors_india@morganstanley.com

Website: www.morganstanley.com

SEBI Registration No.: INM000011203

3) Credit Suisse Securities (India) Private Limited

9th Floor, Ceejay House Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai 400 018

Tel: +91 22 6777 3885

E-mail: list.zomatoipo@credit-suisse.com

Investor Grievance e-mail: list.igcellmer-bnkg@creditsuisse.com

Website: www.credit-suisse.com/in/en/investment-bankingapac/investment-banking-in-india/ipo.html

SEBI Registration No.: INM00001116

4) BofA Securities India Limited

Ground Floor, “A” Wing, One BKC, “G” Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051

Tel: +91 22 6632 8000

E-mail: dg.zomato_ipo@bofa.com

Investor Grievance E-mail: dg.india_merchantbanking@bofa.com

Website: www.ml-india.com

SEBI Registration No.: INM000011625

5) Citigroup Global Markets India Private Limited

1202, 12th Floor, First International Financial Centre, G-Block, C54 & 55, Bandra Kurla Complex, Bandra (East), Mumbai 400 098

Tel: +91 22 6175 9999

E-mail: zomato.ipo@citi.com

Investor Grievance E-mail: investors.cgmib@citi.com

Website: www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htm

SEBI Registration No.: INM000010718

(Source:DRHP)

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