Zomato IPO: Food aggregator gets SEBI's nod to float Rs 8,250 cr share sale; green signal to Chemplast Sanmar, Tatva Chintan Pharma for IPOs too

The Securities and Exchange Board of India has given a go-ahead to Food delivery company Zomato to raise Rs 8,250 crore through an initial public offer (IPO) and offer for sale (OFS).

According to Draft Red Herring Prospectus (DRHP), the IPO comprises of fresh issue of equity shares worth Rs 7,500 crore and an offer-for-sale of around Rs 750 crore by Info Edge (India) Ltd.  

Zomato has obtained its observation on July 2, an update capital markets regulator showed on Monday. The food delivery aggregator had filed preliminary IPO papers with SEBI in April.

SEBI’s observation is quite crucial for any company to launch public issues like IPO, follow on public offer (FPO), and rights issue.

The proceeds obtained from the fresh issue would be used towards funding organic and inorganic growth initiatives; and general corporate purposes, Zomato had mentioned in the draft papers.

Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd and Credit Suisse Securities (India) Pvt Ltd are the global coordinators and book running lead managers to the issue.

BofA Securities India Ltd and Citigroup Global Markets India Pvt Ltd appointed as merchant bankers to the public issue. The shares of the company will be listed on BSE and NSE.

Earlier, a parent company of Zomato, Info Edge India has reduced its offer for sale size to half, the company will now sell only 50 per cent, or Rs 375 crore, of the initial offer as offer-for-sale (OFS) in Zomato’s IPO, as compared to Rs 750 crore before.

Besides Zomato, the other two companies such as Chemplast Sanmar, Tatva Chintan Pharma Chem have also received approval from SEBI to float IPO. SEBI in its update said an Observations Letter issued on July 2 and June 30, 2021, respectively to both the companies.