Zomato share gains for second straight session after bumper listing

Shares of India’s first food unicorn startup rose 14 per cent to hit a fresh 52-week high of Rs 143.75 on the second day after the blockbuster listing. The stock ended 11.92 per cent higher at Rs 140.85 against the previous close of Rs 125.82. Market cap of the firm rose to Rs 1,10,499.36 crore.
 
On Friday, the food delivery firm Zomato made a bumper debut on bourses with the unicorn hitting the Rs 1-lakh crore market capitalisation mark. The stock opened at Rs 116, 52.63 per cent higher on NSE against issue price of Rs 76. The listing price on the Bombay Stock Exchange was at Rs 115, up 51.32 per cent. The shares of Zomato closed 65.59 per cent higher at Rs 125.85 on BSE. Market cap of the firm rose to Rs 98,731.5 crore.
 
The IPO of Zomato, which closed for subscription on July 16, saw a strong response from all categories of investors with the issues getting subscribed 38.25 times. While the institutional portion was subscribed nearly 52 times, the portions reserved for high net worth individuals and retail were subscribed 32.96 times and 7.45 times, respectively.
 
“Zomato had a super listing on the bourses, as given the low penetration, just two large players in the market, falling advertising costs and company’s focus on the domestic market, growth as well profitability after initial cash burn will improve going ahead,” Mr. Vikas Jain, Senior Research Analyst at Reliance Securities told BusinessToday.In.
 
“One can continue to hold and for fresh investment look for declines when the broader markets correct and give an opportunity,” he added.
 
“I’m a firm believer in India, and where our country will be in the future. India is a tough market to operate in, but if you are building to succeed in India, you are already exceptional. I say that because I believe Zomato and Swiggy are two of the best food delivery apps in the world today. We have a long way to go before we can call ourselves world-class by our customers’ standards, but we are determined to get there,” said Zomato founder and CEO Deepinder Goyal.
 
He acknowledged that the journey that started over 10 years ago was “not always smooth”. He said that many of the decisions he made were not good for the company, and many caused the stakeholders a lot of heartburn.

“That said, we have found ourselves managing times of crisis on different occasions in much the same way – impatiently staying focused on the long term, executing relentlessly, and committing ourselves to do the very best we can do today,” he said.
 
Zomato launched its initial public offering on July 14 and got listed on the bourses on Friday, becoming the first food-delivery unicorn to go public.