For more than a decade, Dependergoyal’s Zomato company has supplied delicacies from spicy crepes dosa to soft vegetable curry pav bhaji, to millions across India.
Now, investors will get a taste of the fast-growing food delivery giant. Shares of the startup surged more than 80% on their debut Friday, after a $1.3 billion initial public offering.
Zomato is one of the first generation of internet startups worth over $1 billion (unicorn) to tap into India’s capital markets and has generated a frenzy rarely seen in the local investment community.
Investors on Twitter have bragged about buying the startup’s shares, eager for the kind of returns that Facebook and Alibaba Holdings are making.
This is India’s largest initial public offering since March 2020 and has received bids from major investors about 35 times the shares it intends to sell.
The strong presence of food delivery companies
Zomato’s inclusion follows strong debuts in food delivery, including China’s Dash Door and Meituan.
It is the culmination of a 13-year journey for co-founder Joyal, 38. He and Pankaj Chada, who has since left, started Zomato as a delivery service in 2008 for their colleagues at Pine & Co.
Last week, Goyal tweeted about the stress of eating and installed an emoji on his Twitter account.
Zomato’s debut also comes buoyed by Chinese billionaire Jack Ma’s Ant Corporation, amid investor concerns that India’s markets are a bubble waiting to burst, and that valuations have outpaced fundamentals.
What dampens optimism about India is one of the world’s worst coronavirus outbreaks, which threatens to undo decades of economic gains.
Investors also have to deal with political risks, as Narendra Modi’s government clamps down on foreign retailers, social media giants, and streaming companies.
For others, the potential outweighs the downsides. With nearly half of India’s 1.3 billion people accessing the internet via smartphones, the bet on Zomato represents optimism that India’s tech startups could go the way of the United States or China, especially given that India’s internet infrastructure is not It is still emerging, and that consumers are accustomed to buying online.