Shares of Info Edge India, which owns a stake in food delivery service provider Zomato, rose 3.14% to an intraday high of Rs 5,100 on BSE after Zomato filed a draft red herring prospectus (DRHP) from the Securities and Exchange Board of India (SEBI) will raise up to Rs 8,250 crore through the sale of shares via an initial public offering (IPO). (Follow the Info Edge share price here)
The company said it intends to use the profits to fund growth initiatives and general corporate goals. Info Edge, the main shareholder, will sell shares worth Rs 750 crore at the time of the IPO. The company, along with national rival Swiggy, backed by Accel, dominates the food delivery market, which research firm RedSeer says is worth $ 4.2 billion.
Launched in 2008, Zomato is one of India’s hottest startups. It is present in 24 countries and employs more than 5,000 people, according to its website. In February, the company had raised $ 250 million from five investors, including hedge fund Tiger Global Management, for a post-currency valuation of $ 5.4 billion. According to draft documents submitted to the Indian market regulator on Wednesday, Zomato’s offer will include a new issue of shares worth up to Rs 7,500 crore.
Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities India, BofA Securities India and Citigroup Global Markets India are the primary book managers for Zomato’s IPO. The company has yet to set the price range and lot size in which investors interested in the sock can bid for its shares during the IPO.
The date of the IPO was not announced by the company DRHP either.
India has been one of the hottest IPO markets to date in 2021, helped by a flood of foreign money and high interest from retail investors. However, since the end of March, a second wave of coronavirus infections has dampened investor enthusiasm for stocks and IPOs. Well-known national brands and names such as Barbeque-Nation Hospitality and Macrotech Developers have seen a moderate response to their listings. While Nazara Technologies and MTAR Technologies have had exceptional beginnings in the stock market.
At 11:32 am, Info Edge shares were trading nearly 2% higher at Rs 5,040, outperforming Sensex which was up 0.95%.