Ant Group-backed food delivery company Zomato has a near $8bn valuation on the cards in its initial public offering (IPO), with shares priced at 0.96 cents to $1.02 per share.
Zomato, one of India’s most biggest startups, has reaped the rewards of a pandemic-induced surge in online ordering.
The lofty $7.98bn figure is at the upper end of the price range, after filing for an IPO in late April.
“While we had a footprint across 23 countries outside India as of 31 March 2021, we have taken a conscious strategic call to focus only on the Indian market going forward,” Zomato said.
Amid India’s ongoing wave of Covid-19, many have taken to ordering in to avoid food shopping and eating out, which has boosted companies like Zomato – much like Deliveroo in the UK.
Food delivery boom
The value of India’s online food delivery market was forecast in May to hit $21.4bn by 2026, swelling from $4.6bn in 2020, according to a ResearchAndMarkets report.
The market has been gaining foreign investment from China’s Ant Group and Japan’s SoftBank.
Just last month, SoftBank’s Vision Fund II sought approval from India’s market watchdog the Competition Commission of India (CCI) to finalise a $450m investment in Zomato’s rival Swiggy.
Market players are focused in the country’s more populated regions like Mumbai, Delhi, Bangalore, Delhi, and Mumbai. However, vendors are now eyeing the growth potential of smaller cities.
Since the pandemic began in India, food giants like McDonald’s and Domino’s Pizza have introduced contactless delivery services, in order to cash in on the increasing market demand.