Zomato IPO: Food Delivery Platform Files For Rs 8,250 Crore Issue, Info Edge To Sell Stake Worth Rs 750 Crore

Info Edge informed selling its stake worth Rs 750 crore in the initial public offering (IPO) of its investee company Zomato.

Delivery man working with the food delivery app Zomato | AFP

With several initial public offerings hitting the market in the last few months, it's the food delivery startup Zomato backed by Ant Group, which has now filed for an initial public offering of up to ₹8250 crores.

As per the Reuters report, draft papers submitted by the online food aggregator Zomato to the market regulator showed the company filing for the IPO.

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Ahead of its much-awaited IPO, the company had also amended its memorandum of association earlier in April to become a public limited company, renaming itself Zomato Ltd.

Zomato has recently introduced home-style meals in association with partner restaurants, as an increasing number of users, sick with covid infections, seek simple meals.

It has implemented out mini-menus on its app. “Over the last few days, one of the most requested features on @zomato has been – a selection of home-style food for people battling poor health. We just launched home-style mini-menus along with thousands of restaurants across the country," Zomato’s founder Deepinder Goyal informed through the social media platform Twitter.

How much stake is the investor Info Edge selling?

Meanwhile, Info Edge on Tuesday informed selling its stake worth Rs 750 crore in the initial public offering (IPO) of its investee company Zomato. In a regulatory filing, Info Edge said the online food delivery platform is proposing an IPO of its equity shares, comprising a fresh issue of equity shares by Zomato Ltd and an offer for sale by Info Edge (India) Ltd.

"The Board of Directors of the Company today considered and have given their approval to the company to participate in the said Offer for Sale of up to such number of shares of Zomato Ltd as would aggregate up to Rs 7,500 million...," it added, as per the PTI report.

The terms and conditions of these will be specified in the Draft Red Herring Prospectus, the Red Herring Prospectus, and the Prospectus, and in certain other offer documents and agreements, the filing said.

How much the company has raised so far?

In February, Zomato had raised $250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora, and others, valuing the online food ordering platform at USD 5.4 billion. On a fully converted and diluted basis, Info Edge's effective stake in Zomato stands at 18.4 percent, Info Edge had said. Last year, Zomato founder and CEO Deepinder Goyal had told employees that the company plans to go for an IPO in the first half of 2021.

The online food delivery segment has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.

Zomato's FY20 revenue had jumped over two-fold to $394 million (around Rs 2,960 crore) from the previous fiscal, while its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) loss was around Rs 2,200 crore.

On April 23, Zomato had announced the appointment of five independent directors on its eight-member board, including four women.

Founded in 2008 in Delhi, Zomato has more than 5,000 employees. Zomato recently raised $250 million from investors including Kora Management and Fidelity Management & Research Co., valuing the startup at $5.4 billion, according to an exchange filing in February by Info Edge India Ltd., an existing backer.

(With inputs from PTI)