Blockbuster IPO Memes Reveal Emotion Amid India’s Unicorn Frenzy

Two Zomato food delivery couriers check their smartphones for customer order alerts. (Photographer: Dhiraj Singh/Bloomberg)

Blockbuster IPO Memes Reveal Emotion Amid India’s Unicorn Frenzy

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Stock exchange filings and prospectuses are dry, drab affairs. Global investors can get a glimpse of the frenzy accompanying India’s first unicorn listing through social media posts.

Zomato Ltd.’s $1.3 billion initial public offering was fully subscribed on the first day of sale, after anchor funds including BlackRock Inc. bid for 35 times more stock than was offered to them. When the food delivery app debuts on the exchanges this month, its market capitalization is expected to be more than 600 billion rupees, greater than the combined value of several of the restaurants it services, according to Vinit Bolinjkar, head of research at Ventura Securities Ltd.

The consumer-facing nature of Zomato’s business boosts brand recall, especially for tech-savvy youth.

Brokerage Paytm Money, whose parent is due for its own IPO soon, said the “Zomato IPO reveals a change of guard in India’s capital markets,” where “young and first-time investors are driving demand.” About 60% of bidders coming though its app on day one were younger than 30.


Social media has also become the place where observers express wariness about valuations, in a world where most sophisticated investors are betting on the loss-making firm. Zomato’s losses stood at 6.82 billion rupees for the nine months ended December 2020, according to the IPO draft prospectus it filed with the Indian market regulator, while Paytm parent One 97 Communications’s consolidated losses for the financial year ended March 2021 were at 17.01 billion rupees.

Twitter saw the hashtag #ZomatoIPOLoss accompany several memes featuring gifs of Bollywood villains and witty one-liners comparing the stock to Mumbai’s famously overcrowded local trains.

The broader buzz around Zomato, which has spilled out from financial circles into the social media space, could push other startups to list. So far Indian startups have mostly been funded by foreign venture capitalists, denying Indian capital opportunity to make profits, Krishna Kumar Karwa, managing director of Emkay Global Financial Services Ltd., told Bloomberg TV in an interview Thursday.

India’s capital markets regulator is proposing a new framework that would make it easier for startups to list at home. A Credit Suisse Group AG report this year found there are about 100 unicorns in India with a combined market value of $240 billion, in sectors from e-commerce and fintech to education, logistics and food delivery.

Zomato’s IPO runs through Friday. As of Thursday afternoon it was 1.3 times subscribed. That should offer some relief to founder Deepinder Goyal.

©2021 Bloomberg L.P.

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