Zomato’s ongoing IPO has attracted so many investors as it was able to draw bids worth $46.3billion and was oversubscribed 38 times in a single day. The IPO is backed by Ant Group based in China and is the first of its kind in India’s food delivery sector. It aims to raise about $1.3 billion, and the shares are priced at Rs.72 to Rs.76 per share with an estimated valuation of up to $7.98billion.
The trend shows that the investors are highly optimistic about the future of this sector in India and they have also placed major bets at almost 52 times the shares on offer. Zomato was able to raise $562million from almost 186 big financial investors even before the IPO. This IPO happens at a time when India’s markets are nearing their all-time highs and receives growing interest from digital companies.
Paytm has also filed draft papers for their IPO and Flipkart is planning to do so following the footsteps of Zomato.
Zomato being mainly a food delivery chain has managed to partner with over 3 lakh restaurants all over India. The company had stated in its draft papers for IPO that the costs and losses will remain even after the IPO. Therefore, many analysts also claim that the company’s valuations were too high as the company is currently not making any profit.