After the onset of the COVID-19 pandemic, it is not uncommon to see orange or red t-shirt-driven bikes flooding the streets. From the time we place an order on Zomato or Swiggy, to the moment the food is delivered feels like an eternity for our insatiable appetites.
But as of late, the first thing you find when you search for ‘Zomato’ is ‘Zomato IPO’. Well, what does this mean?
An IPO is the first time a private company issues stock to the public. Stock can be issued for several reasons: to raise money for growth, or to allow employees and early investors to liquidate some of their shares. The company, based on its valuation, will determine the number of shares they plan to sell, their price, and the percentage of ownership to give up.
On July 14th 2021, Zomato Ltd. went public at Rs.76 per share. A week later, it was listed on the Indian stock exchanges. Deepinder Goyal, Zomato’s founder, meticulously planned this journey into the public market. Around September 2020, he set out a timeline projecting that Zomato would go public by mid-2021. And here we are today, after a perfectly timed listing and a successful IPO.
So, how did they pull it off? After the first few months of lockdown, Zomato saw a surge in the number of its users due to the shutting down of restaurants. This, coupled with global liquidity and low-interest rates, made it the best time for Zomato to list itself.
From being primarily a restaurant-discovery company with an ad-based revenue model, to being a delivery and operations-heavy firm, Zomato has undergone significant transformations in the last couple of years to get to where it is today. Yet it remains to be seen whether the company can sustain its growth in the future.