Indian food delivery startup, Zomato has got the nod of the Securities and Exchange Board of India (SEBI) to raise INR 8,250 crore through initial public offer (IPO) and offer for sale (OFS). This IPO offering comes when food delivery has witnessed a surge amid the second wave of the COVID-19 pandemic.
Zomato has been one of India’s biggest startup success stories over the past decade. It filed the Draft Herring Prospectus (DRHP) in April, which stated that the IPO would comprise a fresh issue of equity shares of the value of INR 7,500 crore and an offer-for-sale of around INR 750 crore by it current investors Info Edge (India) Limited.
However, on Sunday of July 4, 2021, the company has informed SEBI that it would reduce the offer-for-sale by half to around INR 375 crore. The official announcement of the price band has not been made by Zomato yet.
“The reviewed offer for sale by the company would include of such number of equity shares held by the company in Zomato, as would aggregate up to Rs 375 crore, the terms and conditions of which will be stated in the red herring prospectus and the prospectus filed concerning the offer, and in other Offer related documents and agreements,” Info Edge said in its BSE filing on July 4.
Zomato might go public by July end
Zomato might launch its share later this month as the startup has obtained its observation on July 2, an update capital markets regulator showed on July 5, 2021. The food delivery aggregator had submitted preliminary IPO papers with SEBI in April. SEBI’s opinion is crucial for any company to launch public issues like IPO, follow on public offer (FPO), and rights issues.
The shares are expected to be listed on BSE and NSE. Zomato had informed, in its draft red herring prospectus, that it intends to utilize the IPO earnings to fund organic and inorganic growth initiatives and for general corporate purposes.
The food delivery giant had 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.