Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p>We previously examined <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> and expressed our concerns regarding the company’s unit cost dynamics mentioning that the FY21 operating loss is a sign that Zomato is incapable of generating profits even from its most loyal customers who stuck with the company during the hardest days of COVID-19.</p><p>The offer period begins tomorrow (will continue till 16<sup>th</sup> July 2021) at a price range of INR 72.0-76.0 per share, which implies a market cap range of INR 569.6-596.2bn.</p>

We previously examined Zomato (ZOM IN) and expressed our concerns regarding the company’s unit cost dynamics mentioning that the FY21 operating loss is a sign that Zomato is incapable of generating profits even from its most loyal customers who stuck with the company during the hardest days of COVID-19.The offer period begins tomorrow (will continue till 16th July 2021) at a price range of INR 72.0-76.0 per share, which implies a market cap range of INR 569.6-596.2bn.

Zomato IPO Valuation: Making Losses In Most Favorable Circumstances

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. </p></div><div><p>Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>. </p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/zomato-ipo-initiation-emerging-appetites" target="_blank" data-smartkarma-citation="insights:54141" rel="noopener">Zomato IPO Initiation: Emerging Appetites</a>, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. In <a href="https://www.smartkarma.com/insights/zomato-ipo-results-point-to-a-favourable-trajectory" target="_blank" data-smartkarma-citation="insights:54220" rel="noopener">Zomato IPO: Results Point to a Favourable Trajectory</a>, we noted that the FY21 results support our view that Zomato has attractive fundamentals. </p>
<div class="content-highlight"><p>Our relative valuation suggests that Zomato is overvalued at the IPO price range for its forecasted growth. Our base-case DCF valuation is Rs62.84 per share, which is 15% below the mid-point of the IPO price range. Consequently, while we like the fundamentals, we think that the IPO price range is unattractive and are inclined to remain on the sidelines. </p></div>
</div>

Zomato (ZOM IN) is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is Info Edge India (INFOE IN). 
In Zomato IPO Initiation: Emerging Appetites, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. In Zomato IPO: Results Point to a Favourable Trajectory, we noted that the FY21 results support our view that Zomato has attractive fundamentals. 
Our relative valuation suggests that Zomato is overvalued at the IPO price range for its forecasted growth. Our base-case DCF valuation is Rs62.84 per share, which is 15% below the mid-point of the IPO price range. Consequently, while we like the fundamentals, we think that the IPO price range is unattractive and are inclined to remain on the sidelines. 


<p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. </p><p>Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>. </p><p>In <a href="https://www.smartkarma.com/insights/zomato-ipo-initiation-emerging-appetites" target="_blank" data-smartkarma-citation="insights:54141" rel="noopener">Zomato IPO Initiation: Emerging Appetites</a>, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. </p><div class="content-highlight"><p>In this note, we look at the updated prospectus which discloses the FY21 results and recent developments. Overall, the latest results support our view that Zomato has attractive fundamentals. </p></div>

Zomato (ZOM IN) is a leading food delivery platform in India. Zomato has two core business-to-customer (B2C) offerings which are Food delivery and Dining-out. It also has a business-to-business (B2B) offering called Hyperpure and Zomato Pro, the customer loyalty program which encompasses both food delivery and dining-out. Zomato will launch its IPO on 14 July at an IPO price range of Rs72-76 per share. The IPO will raise up to Rs93.75 billion ($1.3 billion) with a primary/secondary split of 96%/4%. The selling shareholder is Info Edge India (INFOE IN). In Zomato IPO Initiation: Emerging Appetites, we stated that that the food delivery market in India is effectively a duopoly between Zomato and Swiggy. Zomato claims to be larger but the key differentiator will be execution to drive growth with positive unit economics. On this front, Zomato has demonstrated a commendable track record. In this note, we look at the updated prospectus which discloses the FY21 results and recent developments. Overall, the latest results support our view that Zomato has attractive fundamentals. 

Zomato IPO: Results Point to a Favourable Trajectory

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>  aims to raise US$1.3bn in its India IPO. This will be the largest listing in India from the technology sector.</p></div><div><p>Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.</p></div><div>
<p>We have covered some aspects of the deal in our earlier notes  </p>
<ul>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, </a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-food-delivery-revenue-was-probably-up-16x" target="_blank" rel="noopener">Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and</a></li>
<li><a href="https://www.smartkarma.com/insights/zomato-pre-ipo-peer-comparison-listed-and-domestic" target="_blank" rel="noopener">Zomato Pre-IPO - Peer Comparison - Listed and Domestic</a></li>
</ul>
</div><p>In this note, we will talk about the updates from the RHP and the deal pricing.</p>

Zomato (ZOM IN)  aims to raise US$1.3bn in its India IPO. This will be the largest listing in India from the technology sector.Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.
We have covered some aspects of the deal in our earlier notes  

Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps, 
Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x, and
Zomato Pre-IPO - Peer Comparison - Listed and Domestic

In this note, we will talk about the updates from the RHP and the deal pricing.

Zomato IPO - Strong 4Q21, Has a Very Long Runway

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>  aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India from the technology sector.</p></div><div><p>Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.</p></div><div><p>We have covered some aspects of the deal in our earlier notes  <a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps </a>and <a href="https://www.smartkarma.com/insights/zomato-pre-ipo-food-delivery-revenue-was-probably-up-16x" target="_blank" rel="noopener">Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x.</a></p></div><div><p>In this note, we will undertake a peer comparison with its global peers and its main local peer.</p></div>

Zomato (ZOM IN)  aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India from the technology sector.Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.We have covered some aspects of the deal in our earlier notes  Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps and Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x.In this note, we will undertake a peer comparison with its global peers and its main local peer.

Zomato Pre-IPO - Peer Comparison - Listed and Domestic

Germany

Delivery Hero SE offers e-commerce services. The Company provides online food ordering services. Delivery Hero serves customers Germany.

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Delivery Hero SE (DHER GR)

Zomato IPO Valuation: Making Losses In Most Favorable Circumstances

Zomato made an operating loss of INR 4.9bn in FY21, indicating its impotence in generating profits even in the most favorable circumstances....

Oshadhi Kumarasiri

Zomato IPO: Valuation Insights

Our DCF valuation is Rs62.84 per share, 15% below the mid-point of the IPO price range. While we like the fundamentals, the IPO price range is...

Arun George

Zomato IPO: Results Point to a Favourable Trajectory

Zomato will launch its IPO on 14 July to raise up to $1.3 billion. Overall, the FY21 results disclosed in the updated prospectus, support our view...

Arun George

Zomato IPO - Strong 4Q21, Has a Very Long Runway

Zomato (ZOM IN) aims to raise US$1.3bn in its India IPO. This will be the largest listing in India from the technology sector.

Sumeet Singh

Zomato Pre-IPO - Peer Comparison - Listed and Domestic

Zomato (ZOM IN) aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India...

Sumeet Singh

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