| 23 April 2024, Tuesday |

Zomato soars 80 percent following $1.3 billion listing

Zomato, the fast growing food delivery giant, has soared more than 80 percent in its Friday debut following a $1.3 billion initial public offering.

Zomato, the first of a generation of internet unicorns to tap India’s capital markets, has generated a seldom-seen frenzy among the local investment community. Investors boasted on Twitter about snagging shares in the startup, yearning for the sort of returns Facebook and Alibaba Group generated.

Its IPO is India’s biggest since March 2020, and got about 35 times more bids from anchor investors than shares it intended to sell.

Zomato’s listing comes on the heels of strong food-delivery debuts, including DoorDash and China’s Meituan. It’s the culmination of a 13-year journey for co-founder Deepinder Goyal, 38. He and Pankaj Chaddah, who has since left, started Zomato as a delivery service in 2008 for their Bain & Co colleagues.

Last week, Goyal tweeted about stress-eating and pinned a clenched-teeth emoji to his Twitter account.

He can be forgiven for an attack of nerves.

Zomato’s first-day performance will serve as a barometer for India’s budding tech scene of unprofitable unicorns, which has produced a coterie of up-and-coming giants from Ant Group-backed Paytm to Flipkart. Also backed by Jack Ma’s Ant, Zomato’s debut comes amid investor concern that India’s markets are a bubble waiting to burst and valuations have outstripped fundamentals.

Optimism about India is tempered by one of the worst coronavirus outbreaks in the world, which threatens to erode decades of economic gains. Investors also have to contend with political risks, with Narendra Modi’s government clamping down on foreign retailers, social media giants and streaming companies.

  • The National News