InfoEdge investments in Zomato | Zomato IPO

In this blog, we will be talking about India’s largest food delivery aggregator that is Zomato’s  IPO that is going to be listed very soon on the stock exchange.

Introduction:

InfoEdge investment in Zomato of Rs. 4.7Cr. is now valued at around Rs. 8000 Cr. which accounts for 100% CAGR in the last 11 years. InfoEdge made this investment in the year 2010. The company has been one of the largest startups with its success stories in the past few decades, has finally filed in SEBI for its IPO.

Zomato IPO:

• Zomato is coming up with its IPO. The Company has already filed the IPO papers in SEBI.
• The size of the IPO is estimated to be around Rs. 8,250 Cr.
• Therein, there will be an Offer for Sale of Rs. 750 Cr. by the parent company ‘InfoEdge’.
• Currently, InfoEdgeholds around 18.4% stake in Zomato, and post this IPO, this stake may be reduced by 1%-1.5% to 16%-17%.

Valuation of InfoEdge:

• In Feb some funds were raised by the private equity of Zomato which was valued at 5.4 billion dollars.
• In Sept 2020 some funds were raised with a valuation of 3.3 billion dollars.
• As per the sources, the current valuation could be around 7-9 billion dollars.
• It will be a large-cap company according to market capitalization.
• Info Edge that is having Rs. 2000 Cr.reserve and will add up more in the future which will be used for funding new startups.

Conclusion:

Zomato has filed the Draft Red Hearing Prospectus (DRHP) in the SEBI for the IPO and this will be an interesting thing to watch the developments and listing of Zomato IPO in the future. The food delivery business is having a very clear view of its business model. Regarding the Infoedge, an Investor needs to be of aggressive risk profile. One needs to follow Growth Discounting Process while investing in this stock. Moreover before making any investments in any of the stocks go through proper research and study.