Tech

Food delivery start-up Zomato files for $1.1 billion IPO in India

Share
Key Points
  • Zomato is one of India's most prominent start-ups and is present in 24 countries and employs more than 5,000 people, according to its website.
  • In February, the company raised $250 million from five investors including hedge fund Tiger Global Management for a post-money valuation of $5.4 billion.
  • Top shareholder Info Edge will sell shares worth 7.5 billion rupees in the IPO.
A Zomato Delivery boy keeps adjusts a food order in his Delivery bike amid Covid-19 (Coronavirus) Pandemic in New Delhi, India on 08 November 2020.
Nasir Kachroo | NurPhoto | Getty Images

Indian food delivery startup Zomato, backed by China's Ant Group, has filed for an initial public offering of up to 82.5 billion rupees ($1.11 billion), as consumers increasingly turn to ordering food online during the Covid-19 pandemic.

Launched in 2008, Zomato is one of India's most prominent startups. It is present in 24 countries and employs more than 5,000 people, according to its website.

In February, the company raised $250 million from five investors including hedge fund Tiger Global Management for a post-money valuation of $5.4 billion.

According to draft papers submitted to India's market regulator on Wednesday, Zomato's offering will comprise a fresh issue of shares worth up to 75 billion rupees. The company said it intends to use the proceeds to fund growth initiatives and general corporate purposes.

Top shareholder Info Edge will sell shares worth 7.5 billion rupees in the IPO.

The company, along with domestic rival Swiggy, backed by Accel, dominates the Indian food delivery market, which research firm RedSeer estimates is worth $4.2 billion.

India has been one of the hottest IPO markets so far in 2021, helped by a flood of foreign money and high interest from mom-and-pop investors.

However, since late March, a second wave of coronavirus infections has dampened investor enthusiasm for stocks and IPOs.

Well-known domestic brands and names such as Barbeque-Nation Hospitality and Macrotech Developers saw a muted response to their stock market listings.

Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities India, BofA Securities India and Citigroup Global Markets India are the lead book running managers for Zomato's IPO.