Zomato IPO Review
The IPO of online food delivery service Zomato is expected to open for public subscription by 14th July 2021. Zomato Limited among the top online Food Service brands in India and many other countries. Zomato created strong revenue and profit growth in the past 3 years. Zomato IPO date has been fixed in the 3rd week of August that is already prepared. This will be the first IPO in India and also the third ever in the world.
Zomato IPO Key Ingredients: Growth in the business segment, strong brand, and a clear understanding of customer needs and expectations. According to the recent Zomato IPO review and forecast, the revenue growth in the past 3 years was only 6%. This should not be a reason for the rejection of investment by potential investors.
Retail investors will need to buy Zomato shares as there are no restrictions on retail shares in India. There are only a few trading days during which the stock will be listed in the BSE. Retail investors can buy Zomato shares from the Mumbai Stock Exchange or the Nasdaq marketplace. I
The Zomato IPO will be listed under the Pink Sheets. This means that the Securities and Exchange Commission will not regulate the trade. The retail investor who intends to invest must buy Zomato shares as low as possible in order to achieve the best price. This is because the company does not intend to ever break even. In order to do this, the company has adopted a dual entry process where it registers shares in the open market, simultaneously selling them in the secondary market. The price band that the company intends to use for the main issue is the discount price band.
Zomato does not intend to use the direct, secondary market for raising capital. Instead, the company plans to use the indirect secondary market to raise funds for its business activities in the near future. The indirect secondary market includes places such as the NYSE and NASDAQ.
There are certain shareholders who are permitted to have more than one share in a company. These shareholders will be given a special dividend known as DRLP. Zomato has adopted a dual entry system with respect to the distribution of dividends. When a shareholder contributes a DRLP number of Zomato shares, then Zomato dividends will be paid to him or her in his or her own name.
If a shareholder invests a crore in Zomato he or she will be paid a DRLP dividend equal to the amount of the crore multiplied by the number of Zomato shares that have been added so far.
Zomato has an operating principle that states that at any given time only two-thirds of the total number of Zomato shares will be available for sale in the open market. Zomato has been operating in the UK since the year 1999 when it began trading on the London Stock Exchange. At the time of this writing, it has had its shares listed on the AMEX. As with all private limited companies, there are no restrictions on the type of ownership and there is no redemption period.
The main business opportunity that Zomato has been in the food delivery sector. In countries like the UK, the Zomato IPO is expected to raise about $75 million.
In My opinion – Zomato IPO is a great opportunity to buy in long term. However, It is expected to get oversubscribed and have good listing gains as well for short-term traders.
Do let me know in the comments if you would be applying for Zomato IPO or not?
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