Zomato IPO subscribed 35x by anchor funds

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MUMBAI: A total of 186 funds, which include some of the biggest names from the investment space globally, along with domestic mutual fund leaders, together picked up about 55.2 crore shares of food delivery major Zomato for nearly Rs 4,200 crore.

A few hours before the opening of the Rs 9,375-crore IPO, the allotment to anchor investors was done at Rs 76 per share, at the upper end of the Rs 72-76 IPO price band.

Merchant banking sources said that the total demand for the Zomato IPO during the anchor investment process was for about Rs 1.5 lakh crore, indicating an oversubscription of about 35 times the number of shares which were up for pre-IPO allotment.

According to a notice on the BSE, notable names among the 186 funds that were allotted shares on Tuesday included global PE majors Tiger Global and Blackrock, along with financial powerhouses like Fidelity, Morgan Stanley, JP Morgan, T Rowe Price and the government of Singapore. Among the domestic majors were SBI MF, HDFC MF and ICICI Prudential MF.

The much talked about Zomato IPO will open on July 14 and close on July 16. Under Sebi rules, the stock will be listed before the end of the current month, most likely by July 27, market sources said.

At the upper end of the price band, Zomato will command a market capitalisation of Rs 60,000 crore. The valuation, which is on a par with the total market value of all the listed hotels companies, has been a subject of much debate since the new age tech-enabled company has been a loss-making one. Zomato’s estimated value is also equal to the combined mcap all the listed quick service restaurants (QSRs) in India, which are its customers as well as competitors.

Listed technology company InfoEdge holds a substantial stake in the app-based food delivery major and is selling part of its stake in the IPO worth Rs 375 crore. In the grey market, the premium for the shares of Zomato has seen some marginal decline in recent times.

From about Rs 10 per share a week ago, it’s now down to about Rs 7.50, market sources said. The slide indicates waning interest in a stock in the unofficial market in the run-up to its listing.