Online food delivery platform Zomato has made a bumper debut at the stock market and with this it has officially become the ‘Top 100 Listed Companies’ in terms of its value which is currently valued at Rs 1 lakh crore in market capitalisation.
As it got listed, the shares of Zomato surged nearly 53 per cent in its debut trade against its issue price of Rs 76.
The stock made its debut at Rs 115, reflecting a huge gain of 51.31 per cent against the issue price on the BSE. It then hit a high of Rs 138, a jump of 81.57 per cent.
At the NSE, it got listed at Rs 116, registering a premium of 52.63 per cent.
Ahead of its debut, Zomato CEO Deepinder Goyal wrote a letter to the shareholders and thanked each and every startup for laying the foundations of becoming an internet giant and using it to the fullest.
But it is also important to know that Zomato was not a behemoth when it started. In 2008, two IITians Deepinder Goyal and Pankaj Chaddah unveiled the company as a restaurant and food listing website called ‘Foodiebay.’ They came across the idea of starting this company when both were working in the same company called Bain Consulting.
The inception of this idea came after they found that there is no such platform that can become a one-stop-shop for restaurant recommendations or provide reviews for restaurants. The first fundraise came from Info Edge at Rs 60 lakh and therefore it is important for all of us to know how this company which started as a small idea became public.
Initially, Zomato’s only source of revenue was through advertisements on its website but later in 2013, Sequoia Capital India led a funding round of $37 million for the company. Both investors Sequoia and existing investor Info Edge saw the immense potential in Zomato and thought that it could be valued at $150 million.
Goyal and Chaddah were two different personalities as the former was not interested to become the spotlight and would instead prefer to work behind the scenes. However, he was adamant of the fact that the company should reach greater heights and this attitude pushed him to bring Zomato where it is today.
Then came a severe roadblock for Zomato in the form of COVID-19 pandemic as it brought a drastic setback for the company. The company’s Red Herring Prospectus (RHP) unearthed that Zomato’s revenue was down by almost a quarter year-on-year to Rs 1,994 crore in FY21. The company’s losses narrowed down from Rs 2,363 crore in FY20 to Rs 812 crore in FY21.
But this didn’t stop Goyal from working hard towards his goal of listing Zomato on the stock market.
Zomato also explored new destinations by planning to unveil its grocery services on the app soon. Zomato invested $100 million in Grofers.
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