According to news reports, Zomato is likely to raise between $750 million to $1 billion through its proposed initial public offering (IPO).
However, the best thing about Zomato IPO is that none of the existing investors are likely to exit or part sell their stake through the issue, the sources mentioned above told the publication.
Zomato founder and CEO Deepinder Goyal had expressed to his company employees last week in a town hall that its IPO will most probably be a 100% primary issue.
Deepinder Goyal also had made it clear that the IPO would be keeping in mind the long-term upshot the investors expect from the stock. “This means the company will end up raising more capital, rather than the shareholders selling stake to public market investors,” said Deepinder Goyal.
According Arvian Research, Zomato’s proposed IPO may come in June at a valuation of $6billion to $8 billion.
“Recently Accel India Partner Prashanth Prakash said expectations are rife in the market that around 10 to 15 startup will go for IPO. We have to understand that Zomato IPO is high especially after the successful IPO of SoftBank-backed Door-Dash in December, when the US-based food-delivery startup opened trading at $182, about 78% higher than its IPO price, on the New York Stock Exchange,” states Arvian Research.
Worth mentioning here is that the development holds significance as it will create a huge war chest for Zomato as it shores up growth in its fight with a well-capitalised competitor like Swiggy and other hyper-local players across along with unorganised players.
Meantime, Swiggy is going ahead with its plans to raise around $800 million in fresh funds. According to an earlier report, the Bengaluru-based company is in advanced negotiations to close a $700-800 million funding round led by sovereign wealth funds Qatar Investment Authority with participation from GIC of Singapore as well as global alternative asset manager Falcon Edge.