Indian food delivery company Zomato surged 65.8% when it debuted on the stock market on Friday, bringing the startup’s valuation to rupees. 9,849 crore (13.28 billion U.S. dollars), and prepared its own listing plan for other domestic start-ups.

This 13-year-old company belongs to the country’s first large-scale local startup that was successfully listed on the Indian Stock Exchange.

Siddhartha Khemka, head of retail research, brokerage and distribution at Motilal Oswal Financial Services, said: “Zomato is definitely a big event for the startup community and other technology companies waiting to enter the capital market.”

Berkshire Hathaway-backed Paytm, hotel company Oyo Hotels, and ride-hailing company Ola are all backed by SoftBank and are other Indian start-ups preparing to enter the market.

Like DoorDash, which is headquartered in the United States, Zomato is primarily a food delivery that works with approximately 390,000 restaurants and cafes in 525 cities in India. It also allows customers to reserve tables for meals, write food reviews and upload photos.

The opening price of Zomato is Rs. 116, 53% premium to the offer price of rupee. 76, The second-best performance among Indian listed companies with a of at least US$500 million, after Power Grid, which rose 73% at the opening of the first trading day in 2007.

Like most other startups, this Gulgram-based company is not yet profitable. It has stated that it will use the funds raised from the listing to improve its delivery infrastructure and gain more users. The company competes with SoftBank-backed Swiggy and Amazon’s food delivery services.

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Long-term goals
The 3-year-old founder, Deepinder Goyal, an from the famous Indian Institute of Technology in Delhi, said: “The huge response to our IPO makes us believe that investors in the world who appreciate the scale of our investment and have long-term Look at our business.”

Analysts agreed, saying that the success of the IPO is a testament to the changing interests of investors and the ability to support risk-taking.

Khemka of Motilal Oswal said: “The market has shown a certain degree of maturity in terms of the business they are engaged in and the financial aspects they provide by trying to understand and evaluate these non-traditional companies.”

China Ant Group holds 16.53% of Zomato, and its largest shareholder is online technology company Info Edge (India), which holds 1.55% of the shares.

Zomato went public after other Internet-based delivery startups such as DoorDash and Deliveroo. Although DoorDash made its debut at the end of last year, Deliveroo failed in March.

Danni Hewson, a financial analyst at AJ Bell, a British investment platform, said: “Zomato did not hinder the debut of this British company.”

“Growth is the key here. Zomato may not be profitable, but it is growing exponentially, and it’s enviable to be able to maintain this momentum.”

© Thomson Reuters 2021