Online meals supply firm Zomato on Tuesday allotted shares value Rs 4,195 crore to anchor traders. It allotted a complete of 552.17 million shares to shut to 200 overseas in addition to home traders at Rs 76 apiece. Some of the traders that acquired anchor allotment embrace New World Fund , Tiger Global and BlackRock. Among the home traders Axis Mutual Fund, SBI MF and HDFC MF acquired allotment.
Sources stated the anchor guide noticed over 30 instances extra demand than the shares on offer. The whole curiosity generated was in extra of Rs 1 trillion, they added.
Anchor allotment, which is finished a day previous to the IPO, gives cues to traders concerning the demand and the standard of the problem. Only institutional traders are eligible to subscribe to shares underneath the anchor quota. Up to 60 per cent of the shares reserved for certified institutional consumers (QIBs) might be allotted underneath the anchor guide.
Zomato’s Rs 9,375-crore IPO opens on Wednesday and closes on Friday. The value band for the IPO is Rs 72-76 per share.
Zomato’s IPO includes Rs 9,000 crore of contemporary fund increase and Rs 375 crore of secondary share sale by Info Edge. At the top-end of the value band, the corporate shall be valued at almost Rs 60,000 crore.
Institutional traders must subscribe to at the least 75 per cent of the IPO as Zomato doesn’t meet the profitability standards laid down by the market regulator Sebi. For IPOs that meet this standards, QIB portion is 50 per cent, excessive networth particular person (HNI) portion is 15 per cent and retail portion is 35 per cent. In the case of Zomato, the retail quota is simply 10 per cent, whereas the HNI portion stays unchanged at 15 per cent.
Zomato is the primary massive new-age firm to faucet the home IPO market. Experts stated traders with high-risk urge for food can subscribe to the IPO provided that the corporate is incurring substantial losses and should proceed to incur losses in close to future.
“Zomato with first mover advantage is placed in a sweet spot as the online food delivery market is at the cusp of evolution. It enjoys a couple of moats and with economies of scale started playing out, the losses have reduced substantially. However, predicting the growth trajectory at this juncture is a little tricky for the next few years. The valuation also appears expensive at 25 times FY21 EV/Sales compared to average of 9.6 times for global peers and 11.6 times for domestic quick service restaurants. Though, valuing such early-stage businesses on a plain vanilla financial matrix might not give the right picture and may look distorted. Investors with high-risk appetite can subscribe for listing gains,” stated a observe by Motilal Oswal.