Shares in Zomato, a Gurgaon-based food delivery company and first of India’s consumer tech startups to go public, closed up 64.7% in its debut day of trading in Mumbai, delivering a key insight into the appetite investors have for the world’s second largest internet market’s burgeoning startup ecosystem.
Zomato’s shares traded all day above the issue price of 76 Indian rupees ($1) and surged as high as 138.9 Indian rupees ($1.87). The 12-year-old firm ended day one of trading on BSE in Mumbai at 125.2 Indian rupees ($1.68), securing a market cap of $13.2 billion, up from about $5 billion valuation it had attained in private markets during the startup’s fundraise earlier this year.
The startup’s $1.3 billion initial public offering was 40 times subscribed last week.
Friday’s milestone of Zomato has equally been significant for the rest of the industry as startup founders and investors closely watched the performance. India’s Twitter timeline on Friday was flooded with well wishes and celebratory messages from industry colleagues.
Ashish Dave, India head of Mirae Asset, a backer of Zomato, said the listing and performance of Zomato today has delivered the missing piece of liquidity in Indian startup ecosystem.
“This validates that we can generate large IPOs, which then makes our startups more attractive for global LPs. It also gives Indian investors a chance to participate in the India tech journey rather than from watching it from sidelines,” he told TechCrunch, adding that retail investors of this generation will finally find a way to get in on the action with the brands they recognize and have grown with.
"But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have" https://t.co/sM1Z2Q1sES
— Lizzie Chapman (@ChapmanLizzie) July 23, 2021
— Upasana Taku (@UpasanaTaku) July 23, 2021
@zomato IPO is just a sneak peak into the India's tech renaissance.
Our country will be the talent, tech and transformation capital of the world.
For many, it's BAU. For they know, this is just the advent of the beginnings.
Here's to an exciting decade! Back to work now :)
— Tejeshwi Sharma (@tejeshwi_sharma) July 23, 2021
— Aloke Bajpai (@alokebajpai) July 23, 2021
butterfly effect moment today for India Tech sector.@zomato ipo is the match that lights the fire; and the effects will persist for a decade or two.
what a time to be here in this market, in tech industry, and this peer group of makers.
— miten sampat (@miten) July 23, 2021
Home run for @zomato IPO and a fantastic moment for the Indian startup ecosystem. Congratulations to the founders, investors, and the team!
Hope to see many more such celebrations as more startups reach the IPO pitstop before taking off on more daring rides.
— Navin Madhavan (@madnavin) July 23, 2021
Series A, B, C…Z is all great.
But seeing your brand on the stock market ticker, must be the most incredible feeling.
— Bala Sarda (@balasarda) July 23, 2021
What a moment for everyone. Thank you Zomato https://t.co/Ik6WXO3zLc
— pj (@BeingPractical) July 23, 2021
Zomato chief executive Deepinder Goyal was quick to reciprocate. In a blog post, Goyal wrote, “Today is a big day for us. A new Day Zero. But we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem. Jio’s prolific growth has set all of us up for unprecedented scale. Flipkart, Amazon, Ola, Uber, Paytm – have also over the years, collectively laid the railroads that are enabling companies like ours to build the India of the future.”
“They say it takes a village to raise a child, and we are no exception. Hundreds of people have selflessly played a part in making Zomato what it is today.”
Indian tech startups have raised a record amount of capital this year as some high-profile investors have doubled down in the South Asian market. Swiggy, Zomato’s chief rival in India, said earlier this week it had raised $1.25 billion from SoftBank’s Vision Fund 2 and Prosus among others at a valuation of $5.5 billion.
A handful of other firms are also preparing to publicly list within a few months. Financial services startups Paytm and MobiKwik filed for their initial public offerings earlier this month. Online insurance aggregator Policybazaar is expected to file its paperwork within a few weeks.
“I don’t know whether we will succeed or fail – we will surely, like always, give it our best. But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have, and build something way more incredible than what we can dream of,” wrote Goyal.