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Zomato cashes on Pandemic Surge, files for an IPO to raise $1.1 Bn

Zomato’s moment of truth has finally arrived and so has for India’s burgeoning startup ecosystem as the food delivery major on Wednesday filed the draft red hearing prospectus for raising Rs 8.250 Cr or  $1.1 Bn. The 8.250 Cr IPO will give a partial exit to its earliest and largest stake holder Info Edge, which will take home nearly Rs 750 Cr through secondary sale proceedings. Info Edge currently holds an 18.1% stake in Zomato.

Info Edge’s profitable partial exit from Zomato has already given a good trigger to its share price, with the stock currently trading at around Rs 5,036 at the time of filing this story. The stock price rose by nearly 1.80% during the intraday trading session.

Info Edge also owns almost 15% stake in PolicyBazaar, an insurance aggregator that is equally likely to file for an IPO pretty soon.

Zomato, in all likelihood, will now perhaps become the first Indian unicorn to go for a public listing.  The Gurgaon based startup will seek a valuation of $6bn through its public listing. It will be interesting to see whether the markets will validate this eye-popping valuation. If the stock market does give a thumbs up to Zomato’s valuation then it will serve a huge confidence to not only to startups that have lined up IPOs this year but also for India’s startup industry. Notably, most startups are often accused of indulging in the valuation bubble game, partially fueled by the much-venerated VC industry.

Zomato’s much anticipated IPO has an undeniable footprint of Sanjeev Bikhchandani, founder of India’s biggest job portal Naukri.com. Bikhchandani became a prominent figure in India’s internet driven tech industry after he successfully listed Info Edge (Naukri’s parent company) on the stock market in 2006. After more than a decade, Bikhchandani is back at the forefront of driving the public listing one of India’s most high-profile startups.

 

This highly anticipated IPO actually marks a historic moment for India’s much-talked-about startup industry. More than anything else, Indian startups valiant confidence to go for a public listing is a sure sign that the startup industry is reaching a maturity level. After all,  the IPO-bound startups will now have to taste their business fundamentals in the real market, a far-cry from the nascent days in 2008-09 when raising even small funding round was a colossal challenge for most Indian startups.

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