Zomato IPO: Hunger for home-grown unicorn company Zomato's Initial Public Offering (IPO) seems high among the investors in the grey market. Zomato IPO GMP (Grey Market Premium) today is around 20 per cent, which is near 5 per cent higher at ₹13 to ₹17 from its yesterday price. According to market observers, this rise in the Zomato IPO GMP today is due to the fast approaching subscription opening date. They said that Zomato IPO subscription is opening on 14th July 2021 and it will remain open for bidding till 16th July 2021. So, rise in Zomato IPO grey market premium was expected but they advised investors to look at financials of the company too while making any investment decision in regard to the Zomato IPO subscription.
Zomato IPO in grey market
Zomato IPO GMP today is ₹13 to ₹17 which was at ₹8 to ₹12 yesterday. According to market observers, Zomato share price in the grey market is expected to rise as it is going to open for subscription from tomorrow. So, if we go by the market observers' views, the expected listing of the Zomato IPO in the grey market is around ₹89 to ₹93, which is around 20 per cent higher from Zomato IPO price of ₹72 to ₹76.
Speaking on what Zomato IPO GMP reflects Avinash Gorakshkar, Head of Research at Profitmart Securities said, "GMP of an IPO is an unofficial data that bidders are taking these days as cue for the listing gains or may say success or failure of an IPO. Bidders look a the GMP of an IPO and then add it with the issue price and on the basis of that they make a prediction about the expected listing price of the IPO. But, in my view, one should look at the financials of the company for making any decision in regard to IPO subscription." Gorakshkar said that financials of Zomato is quite strong and it may witness huge jump in business post-Covid as it has limited competitor in its business.
Highlighting the fundamentals of Zomato IPO Saurabh Joshi, Research Analyst at Marwadi Shares and Finance Limited said, "The company is going to list at a P/S (Price to Sales) multiple of 29.9 based on its FY21 sales with a market cap of ₹5,96,234 million. As there are no listed peers in India, so valuations cannot be compared on a relative basis. We recommend to subscribe this IPO as the company is one of the leading food service platforms in India having recognized consumer brand equity and is well placed to capitalize on the large market opportunity available in India."
Asked about the listing gains one can expect from Zomato IPO Avinash Gorakshkar of Profitmart Securities said, “One can expect 10-15 per cent listing gains from the IPO as its business model reflects rise in volume as the company has limited competitor once the market comes out of the Covid-19 fear."
