POINTERS OF DEVELOPMENT
A. Food delivery portal goes online
The Initial Public Offering IPO Process is where a previously unlisted company sells new or existing securities and offers them to the public for the first time. India’s biggest initial public offering (IPO) this year offered by food delivery portal and restaurant aggregator Zomato is open today on 14 July 2021. Zomato’s IPO got fully subscribed on the first day of bidding, led by a good response from the retail investors.
B. Great opening of the IPO
The qualified institutional buyer category was subscribed 55 times while the retail category was about 8 times as per the newspaper reports. Before an IPO, a company is considered to be private – with a smaller number of shareholders, limited to accredited investors (like angel investors/venture capitalists and high net worth individuals) and/or early investors (for instance, the founder, family, and friends).
C. Details about the IPO
The Rs 9,375 crore which will remain open till 16 July has a fixed price band of Rs 72-76 per equity share. Zomato is the first Indian unicorn and food delivery company to launch its IPO. It is backed by Jack Ma’s Ant group. Here are some of the details about the Zomato IPO:
- The total size of the IPO is Rs 9,375 crore of which the fresh issue of equity shares is worth Rs 9,000 crore.
- Out of the total offer, investor Info Edge (India) has an offer-for-sale (OFS) worth Rs 375 crore.
- Subscribers can bid for 195 equity shares and in multiples thereafter.
- Ten percent of the issue is reserved for retail investors.
- As much as 75 percent of the Zomato IPO will be reserved for qualified institutional buyers (QIBs).
- Non-institutional investors (NIIs) will have 15 percent of the IPO reserved for them.
- The company has raised Rs 4,196 crore from 186 anchor investors at the price of Rs 76 per share for 55,21,73,505 equity shares.
- The book-running lead managers of the IPO are Morgan Stanley India Company, BofA Securities India, Kotak Mahindra Capital Company, Citigroup Global Markets India and Credit Suisse Securities (India). Zomato IPO has received subscribe rating from several analysts, however, Moneycontrol reports that the loss-making status of Zomato is a concern. The funds generated from the IPO will be used for funding organic and inorganic growth initiatives of the company.
D. Domination of Young Investors
The online food-delivery giant, Zomato, saw a massive surge in young and first-time investors after the launch of its initial public offer (IPO), on July 14. To showcase this massive uptick, historically only around 55 per cent of IPO applicants on the Paytm Money platform have been under the age of 30. As it stands now 60 per cent of Day-1 Zomato IPO applicants are under the age of 30. After an IPO, the issuing company becomes a publicly listed company on a recognized stock exchange. Thus, an IPO is also commonly known as “going public”.
The IPO which is readied to shut on July 16, has actually seen a huge need uptake from the more youthful generations stated Paytm Cash in a launch.
Paytm, introduced the launch of a function that enables individuals to get the IPOs a couple of days before the real opening day. The attribute was called the “Pre-open IPO Application” This was presented to raise the retail individuals’ engagement in the IPO. Zomato was the very first IPO on Paytm Cash to utilize this attribute. To better increase customer participation, Paytm Cash additionally brought out several various other attributes such as one-click IPO applications, IPO applications through investor groups, as well as monitoring of real-time IPO membership numbers. One more fad that took the Zomato IPO by the tornado was the engagement of smaller-sized cities and communities.
E. Process of IPO
Below are the steps a company must undertake to go public via an IPO process:
- Select a bank to advise the company on IPO and for underwriting services. Underwriting is the process through which an investment bank (the underwriter) acts as a broker between the issuing company and the investing public to help the issuing company sell its initial set of shares.
- Due diligence and filings
- Pricing
- Stabilization
- Transition- The final stage of the IPO process, the transition to market competition, starts 25 days after the initial public offering.
Image: India TV
