65% Zomato Shares Changed Hands On Listing Day
Bulk of Zomato IPO investors booked profit taking advantage of the listing-day pop.
Nearly seven out of every 10 shares issued in Zomato Ltd.’s initial public offering saw a change in ownership on its market debut, suggesting that bulk of the investors booked profit taking advantage of the listing-day pop.
Shares of the restaurant discovery and food delivery company listed at Rs 115 apiece on the National Stock Exchange, a 51.3% premium to its issue price of Rs 76. It rose to an intraday high of Rs 138.9 (or nearly 83% above the IPO price). The stock pared some of the gains to end its first day of trading about 64.8% higher at Rs 125.85 on the BSE.
Zomato issued 122.7 crore shares in its initial public offering. Of these, ahead of the IPO it issued 55.21 crore shares to anchor investors, who are locked in for 30 days and couldn’t have traded on debut.
Total shares traded on both the National Stock Exchange and BSE at the end of the first trading day stood at 74.01 crore. That’s about 60.30% of the shares on offer in the IPO and 109.7% excluding the anchor portion. Meaning, many traders bought and sold shares during the day.
The total Zomato shares delivered stood at 44.30 crore, accounting for 59.9% of the shares traded on both the stock exchanges. Or 65.6% of the shares offered in the IPO, excluding the anchor allotment.
Zomato shares worth Rs 9,313.7 crore were traded and worth Rs 5,575.6 crore were deliverable at the closing price of Rs 125.85 apiece on Friday.
For purpose of comparison - in two recent IPOs — GR Infraprojects Ltd. and Clean Science and Technology Ltd.— the deliverable quantities were 46.1% and 54.3% respectively on July 19, the day these listed.
While churn for GR Infraprojects was at 86.7% of the IPO issue excluding anchor portion, it stood at 66.1% for Clean Science and Technology.
On average, daily marketwide delivery ranges between 24-28% on a given day.
Zomato IPO’s was subscribed more than 40 times. Institutional investors subscribed 54.7 times, while the portion set aside for their non-institutional counterparts was subscribed 34.8 times. The portion for retail investors saw demand of 7.9 times, while shares reserved for employees were undersubscribed.
GR Infraprojects and Clean Science and Technology witnessed non-institutional portion being subscribed 238-times and 211-times and their share prices doubled on listing day.
High gains on listing day may prompt higher churn in a debutante stock as IPO traders may prefer to book profits and investors left out in the IPO allotment may be willing to enter even at higher prices.