Zomato’s roaring debut in India powered by Ant sets the pace for internet startup

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BENGALURU (Reuters) – Shares of food delivery company Zomato Ltd (ZOMT.NS) nearly doubled on Friday in India’s first premium listing of a local unicorn, setting the pace for a slew of these internet-based startups. that thrive during the COVID-19 pandemic.

Paytm backed by Berkshire Hathaway Inc (BRKa.N), hospitality company Oyo Hotels and Ola Inc, both backed by SoftBank (9984.T), are among the Indian start-ups set to enter the markets, benefiting from support from foreign funds and investors. locals.

Zomato shares rose 82.8% after opening at 116 rupees in pre-opening trade, a 53% increase over the offer price of 76 rupees for its initial public offering of 93.75 billion rupees, valuing the company at around $12 billion.

The Chinese company Ant Group has a 16.53% stake in Zomato, while its largest shareholder is the online technology company Info Edge (India), which holds an 18.55% stake.

“Today is a great day for us… We couldn’t have gotten here without the amazing efforts of India’s global internet ecosystem,” Dibinder Goyal, founder and CEO of Zomato, said in a blog post.

Goyal, 38, a graduate of the Indian Institute of Technology in Delhi, launched Zomato in 2008 with fellow graduate Pankaj Chadah. As of March 31, it has operated in around 525 cities in India and has partnered with nearly 390,000 restaurants.

It’s the first startup to go public in India’s food delivery market, which research firm RedSeer has estimated to be $4.2 billion. It offers home delivery of food, allows customers to reserve dining tables at the restaurant and collect restaurant reviews, making it a competitor to SoftBank-backed Swiggy and Amazon.com (AMZN.O) food delivery service.

The company’s bid last week attracted $46.3 billion in bids, making it 38 times more, with major institutional investors placing big bets. Read more

“Growth is key here. Zomato may not be profitable but it is growing exponentially and is in an enviable position to maintain that momentum,” said Danny Hewson, financial analyst at AJ Bell, an investment platform in England.

Zomato’s loss for the year ended March 31 narrowed to 8.13 billion rupees, while revenue from operations declined slightly year-on-year to 19.94 billion rupees.

“We will not change our course to achieve short-term profits at the expense of the company’s long-term success,” Goyal said.

(1 dollar = 74.5250 Indian rupees)

Additional reporting by Chandini Munaba and Anurun Kumar Mitra in Bengaluru; Editing by Aaron Coeure and Kim Coogle

Our Standards: Thomson Reuters Trust Principles.

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