Zomato gets Sebi's go-ahead to float Rs 8,250-cr IPO

Food delivery platform Zomato has received markets regulator Sebi's go-ahead to raise Rs 8,250 crore through an initial share-sale.

The initial public offer (IPO) comprises fresh issue of equity shares worth Rs 7,500 crore and an offer-for-sale to the tune of Rs 750 crore by Info Edge (India) Ltd, according to draft red herring prospectus.

Zomato, which filed preliminary IPO papers with Sebi in April, obtained its observation on July 2, an update with the regulator showed on Monday.

Sebi's observation is very necessary for any company to launch public issues like IPO, follow on public offer (FPO) and rights issue.

Going by the draft papers, proceeds from the fresh issue would be used towards funding organic and inorganic growth initiatives; and general corporate purposes.

The online food delivery segment has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.

Zomato's 2019-20 revenue had jumped over two-fold to USD 394 million (around Rs 2,960 crore) from the previous fiscal year, while its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) loss was around Rs 2,200 crore.

In February, Zomato had raised USD 250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at USD 5.4 billion.

Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd and Credit Suisse Securities (India) Pvt Ltd are the global coordinators and book running lead managers to the issue.

BofA Securities India Ltd and Citigroup Global Markets India Pvt Ltd have been appointed as merchant bankers to the public issue. The shares the company will be listed on BSE and NSE.

Last year, Zomato founder and CEO Deepinder Goyal had told employees that the company was planning to go for an IPO in the first half of 2021.