Indian food delivery startup Zomato skyrocketed as much as 80 per cent on its stock market debut today, setting the pace for a string of upcoming listings in the country.
Shares in Zomato, which is backed by Ant Group, surged as high as 138.9 rupees each, giving the company a market capitalisation of $12bn.
It closed nearly 65 per cent above its offer price at 125.20 rupees as investors rushed to buy up shares.
The listing of Zomato, which was founded 13 years ago, is one of the first generation of Indian startups planning initial public offerings.
It is also India’s first stock market listing of a unicorn — a startup valued at more than $1bn.
“Zomato is definitely a big event for the startup community, and for the other technology companies that are waiting to come to the capital market,” said Siddhartha Khemka, head of retail research, broking & distribution at Motilal Oswal Financial Services.
Berkshire Hathaway Inc-backed Paytm, hospitality company Oyo Hotels and ride-hailing firm Ola, both backed by Softbank, are among other Indian startups set to enter markets.
Zomato’s app focuses on food delivery services, with 390,000 restaurants and cafes in 525 Indian cities signed up to its platform. It also allows customers to book tables for dining in, write food reviews and upload photos.
In the year to the end of March, Zomato narrowed its losses to roughly $110m. It has said it will use the money raised from its listing to better its delivery infrastructure and acquire more users.
Founder Deepinder Goyal said the “tremendous response to our IPO gives us the confidence that the world is full of investors who appreciate the magnitude of investments we are making, and take a long term view of our business”.