Zomato: India’s most-valued listed internet company

Until recently, Indian technology companies preferred to be private because deep-pocketed investors rewarded disproportionate investments in growth. Now, public markets seem willing to accept the same risk appetite—at least with Zomato

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Aditi Shrivastava

July 23, 2021

4 Min Read

Zomato’s listing on Friday, advanced by four days, has not disappointed India’s startup ecosystem. Its share price popped up 82% on trading debut to Rs 138 apiece, nearly hitting the upper circuit.

Its market capitalization is nearly Rs 1 lakh crore, or $13.5 billion, about 46% higher than that of its early backer Info Edge, which has a market cap of Rs 66,000 crore ($8.9 billion). Its market cap is also comfortably higher than Zomato’s last private market valuation of $5.4 billion, or Rs 40,000 crore, in January.

As Zomato’s public share listing matched the euphoria around US-based DoorDash’s IPO and did better than UK-based Deliveroo’s, it also became India’s most-valued listed internet company. The food delivery company is now more valuable than Mahindra & Mahindra, Coal India and Britannia Industries.

The listing makes Zomato one of the world’s most richly valued tech stocks. Or at least the most richly valued online food delivery startup. Based on its market cap on trading debut, Zomato is valued at 46 times its trailing FY 2020-21 revenue. That, as compared with 4.5 times for UK’s Deliver, which has a market cap of $7.4 billion, and DoorDash, which was at 20 times trailing revenue on Thursday at a $58.3 billion market cap. China’s Meituan has a market cap of over $200 billion and a valuation multiple of about 12 times.

Zomato’s IPO is a big win for the company’s employees, who own about 4.2% stake in it, as per the listing prospectus. That’s over Rs 4,000 crore ($542 million) worth of shares. And there are additional employee stock ownership plans at Zomato, which means that the potential wealth generated through the listing will only increase. 

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