SEBI officially approves Zomato's IPO application

The Securities and Exchange Board of India (SEBI) has formally approved food delivery company Zomato's application for an initial public offering (IPO).

Zomato, backed by China's Ant Group, filed for the IPO in April and is said to be looking to raise up to $1.2 billion.

According to the Draft Red Herring Prospectus (DRHP) filed by Zomato, the company will offer equity shares aggregating up to Rs 7,875 crore (nearly $1.1 billion). Of this, Rs 7,500 crore will be fresh issue, while Rs 375 crore will be an offer for sale for its existing investor InfoEdge.

Zomato had raised $250 million in its pre-IPO primary fundraise a couple of months ago at a valuation of $5.4 billion from investors such as Kora Management, Tiger Global, Fidelity, Dragoneer and Bow Wave. After that, InfoEdge, one of Zomato's earliest investors, said its effective stake in Zomato is now 18.4 percent.

This was on top of the $660 million-primary round that it closed in December 2020, at a valuation of $3.9 billion from ten new investors including Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae and Steadview.

Last week, the company also signed up a deal to invest $120 million in online grocery firm Grofers. The approval for the deal is pending with the Competition Commission of India (CCI).