Zomato

As we all know Zomato is an Indian multinational restaurant aggregator and food delivery company pioneered by Deepinder Goyal, Pankaj Chaddah, and Gunjan Patidar in 2008. It offers information, menus, and user critiques of restaurants in addition to meals delivery alternatives from partner restaurants. It serves clients a database of restaurants to find out nearby eateries. Connecting clients to restaurants is the company’s primary goal. In April 2020, because of a growing demand for online groceries amid the COVID-19 pandemic, Zomato released its grocery delivery services named Zomato Market in 80+ towns throughout India. It delivered Contactless Dining to get prepared for a post-lockdown world. Through this initiative, the company offers facilities like menu, ordering, and bill payments via bar codes or the app.

On 23rd July 2021, Zomato went public, opening its Initial public offering at a rate band of Rs 72-76 per share. It is the first Indian internet unicorn to make its stock market debut. Zomato IPO saw a huge hype on all social media platforms. It is the largest to hit Dalal Street since SBI Cards and Payment Services’ Rs 10,341-crore IPO in March 2020. The mega public issue of the food-tech unicorn noticed a subscription of over 38 times, receiving a sturdy response from all pockets of traders. Looking at the buzz zomato increased its issue size by 20%. Zomato’s stock price was up 66% from IPO price of Rs 76. On opening, Zomato shares hit 20% upper circuit at Rs 138, almost doubling IPO investors' money. Its total market capitalization is Rs 98,211 crore. Currently, Zomato shares have seen a plummet on 24th August after plunging almost 9% in on the previous day's session as the mandatory 30 days lock-in period for anchor investors ended. Shares of the company declined over 3% on 24th August, registering a relegation of over 13% in the closing days.

It has been observed that some selling pressure is seen for 1-2 days in most of the counters after the lock-in period ends for their anchor investors post listing however it acts as a buying opportunity in most of the quality stocks wherein low made during this period acts as strong support for the next leg of the rally. Looking at Zomato then 120 is strong support and we could see some buying attraction around this level.

Thank you.

Regards,

Krimisha Mehta (Section R),

Kautilya,

IBS Mumbai.