The issue of online food delivery platform Zomato has been recommended by several analysts. Analyst invests in Zomato’s IPO on new business listings, UNICORN’s unique status in the food delivery segment (companies with a value of over $1 billion), huge growth potential in Tier-II and Tier-III cities and a strong network of restaurants. giving advice.
Zomato is the first food delivery aggregator startup to be listed. Advising a buy on Zomato’s IPO, analysts told Moneycontrol that the valuation of the company seems to be higher than that of global companies. He also said that the loss-making status of the company is also a cause for concern.
What is the costly valuation?
The price band for this IPO has been fixed at Rs 72-76 per equity share, which looks expensive.
Typically, analysts value stock in terms of Price to Earnings (P/E), Price to Book Value (P/BV), Price to Sales (P/S) and Enterprise Value to Sales (EV/sales).
“Zomato is valued at 19.7x FY22E and 13x FY23E P/S at 13x as compared to global players in this segment,” said Pranav Kshatriya, Vice President (Institutional Equities), Edelweiss Securities.
Motilal Oswal Analyst Sneha Poddar said, “Zomato is the first company in the online food delivery segment to be listed The company will get the advantage of coming first. The loss of the company is coming down now but the growth of the company is a bit difficult for the next few years.
One of the biggest IPO
Zomato’s IPO is the biggest issue after SBI Card in the last 16 months. SBI card issue came in 2020. SBI Card had raised Rs 10,355 crore from the issue.
4196 crore raised from anchor investors
Zomato has raised Rs 4196.51 crore on July 13 from 186 anchor investors. The company will now raise the remaining money of the issue through IPO.
The company’s IPO is open today and will close on July 16. The company’s issue price band is Rs 72-76. The company has issued a fresh issue of Rs 9000 crore while Rs 375 crore will be raised through an offer for sale.
