The company’s internal review of the IPO and other processes was completed on April 22, 2021. Sebi is likely to take about two weeks to review the DRHP and the final launch will depend on the market conditions, a source familiar with the development said.
The food delivery platform and restaurant aggregator platform was founded by Deepinder Goyal and Pankaj Chaddah as Foodiebay in 2008 and was renamed Zomato on 18th January 2010.
The company’s move comes a few weeks after it converted itself from a private company to a public limited company by amending its Memorandum of Association and renaming itself Zomato Limited.
It said the move to become a public limited company was required as it plans to consider filing the DRHP with Sebi and relevant stock exchanges to list its equity shares on one or more of the stock exchanges. It was originally incorporated as a private limited company on January 19th, 2010.
DRHP is the first document that a company that wants to list its shares on a stock exchange, files with Sebi. A DRHP is an exhaustive account of the vital details of a company, including date of incorporation, description of the business model, and risks, among other things.
Primary fundraise
Zomato raised $250 million in its pre-IPO primary fundraise a couple of months ago at a valuation of $5.4 Billion from investors such as Kora Management, Tiger Global, Fidelity, Dragoneer, and Bow Wave. Post this, Info Edge, one of Zomato’s earliest investors said its effective stake in Zomato is now 18.4 percent.
This was on top of the $660 million primary round that it closed in December 2020, at a valuation of $3.9 billion from ten new investors including Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae, and Steadview. Goyal had said then that the company is in the process of also closing a $140 million secondary round and that it was raising primary capital as a war-chest for future mergers and acquisitions and to fight off price wars from the competition.
Recovery Amid Pandemic
After the initial Covid shock in March last year, Zomato had said in September 2020 that the online food delivery space has recovered and even exceeded pre-Covid levels in a number of large pockets in India, as more people embrace online ordering.
Zomato co-founder and CEO Deepinder Goyal had said that the tailwinds for food delivery businesses are clearly visible, and that he believes the growth of the sector will accelerate post-vaccine. He also said the burn rate is very low and that its market share is accelerating in all regions.
Zomato reported a revenue of Rs 2,486 crore for FY20, even as its losses widened to Rs 2,451 crore during this period, as the pandemic shrunk order volumes and dine out revenue.
n a story that is now part of startup folklore, it raised its first round of funding after Info Edge founder Sanjeev Bikhchandani sent a cold email to Goyal after using Foodiebay for many months to discover menus of restaurants in Delhi. Goyal responded in a day, they met within 2 days and shook hands for a deal in 72 hours of that first email.
Startup ecosystem
Zomato’s much anticipated public listing comes at a time when the Indian startup ecosystem is seeing heightened funding activity.
India has seen just a handful of Internet companies going public in the last two decades. Apart from Zomato, Policybazaar, Nykaa, and Delhivery are also firming up plans for a public listing, even as there is a buzz of Flipkart and Freshworks listing in the US.
These IPOs will be the indicators of how successful India’s booming startup economy is and success could lead to more capital inflows into private markets.
(The story is based on inputs from Money Control)
