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Harsh Goenka’s tweet on Zomato sparks debate on loss-making unicorn’s IPO success – Mint

With Zomato’s mega initial public offering (IPO) ending with a bumper oversubscription on Friday, RPG Enterprises chairman Harsh Goenka took a swipe at the success of the food ordering and delivery company. Taking to Twitter, Goenka said he is looking to start an app like Zomato or its competitor Swiggy and will provide food at a 40 per cent discount with a loss of “only” 3,000 crore.

He further added that “If you think the loss is less, I will give a 60% discount. I will then list it at 1 lakh crore.”

Twitter user Ashok Ramachandran said: “I was sharing the exact same thing with my friend’s sir. Absolutely respect what all these companies do and no offence. But puzzled. People are investing in something which is not even tangible.”

Zomato got bids for 2,751.25 crore shares against 71.92 crore shares on offer, stock exchange data showed on Friday. The IPO is India’s biggest since March 2020.

Institutional investors, who shied away from in the first two days of the IPO, bid several times over the number of shares reserved for them.

While qualified institutional buyers or QIBs bid almost 52 times the quota reserved for them, non-institutional investors bought 640 crore shares against their quota of 19.43 crore.

Retail investors bid 7.45 times against the 12.96 crore shares reserved for them.

The IPO has already generated a lot of buzz among institutional and retail investors alike, given Zomato’s rapid growth over the last few years. However, a section of the market is worried about valuations as Zomato is still making losses at the net level,

Zomato mega IPO

The IPO opened for subscription on July 14 in a price band of 72-76 per share. It closed on Friday.

Zomato has already mobilised 4,196.51 crore from 186 anchor investors on July 13, a day before the issue opened. The IPO size has been reduced to 5,178.49 crore from 9,375 crore earlier.

The company, backed by Jack Ma’s Ant Group Co, is the first from a long list of Indian unicorn startups to launch an IPO. It is also the first among Indian online food aggregators.

Incorporated in 2008, Zomato is present in 525 cities in India, with 3,89,932 active restaurant listings along with a presence in 23 countries outside India.

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