Ant-Backed Indian Unicorn Zomato Gains 66% in Trading Debut
(Bloomberg) -- Indian online food-delivery and restaurant platform Zomato Ltd. surged in its trading debut, setting the stage for a plethora of unicorns to follow the service with initial public offerings.
The shares gained about 66% to close at 126 rupees in Mumbai Friday, compared with the IPO price of 76 rupees. Zomato raised $1.3 billion from investors including Morgan Stanley and Fidelity Investments in the share sale last week.
Zomato is leading several consumer-technology startups waiting to publicly trade shares in India, including the parent of digital-payments service Paytm, which has filed for the country’s biggest IPO at $2.2 billion. The listing caps a busy first half for domestic listings as local indexes hover near record highs, buoyed by cash injections by central banks worldwide.
“It’s a new dawn for the consumer-tech businesses in the listed space,” said Rakhi Prasad, an investment manager with Alder Capital. The sector is relatively underrepresented in Indian public markets, compared with 30% market capitalization among the 100-biggest listed firms in the U.S. and China, she said.
The IPO will be a boon for Ant Group Co., which is benefiting from its early investments in Indian Internet companies including Zomato and Paytm. The Chinese financial-services firm initially invested in Zomato in 2018 and had a stake of about 16% before the share sale.
“Zomato with first mover advantage is placed in a sweet spot as the online food delivery market is at the cusp of evolution,” said Sneha Poddar, an analyst with Mumbai-based Motilal Oswal Financial Services Ltd. She said Zomato has gained market share over the past four years, and its stock is a good long-term bet though “predicting the growth trajectory at this juncture is little tricky.”
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