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Indian food delivery Zomato shares jump over 70%

Shares of Indian food delivery company Zomato increased more than 70% in their stock market on Friday.

The initial public offering price showed 77 rupees per share. The stock opened at 117 rupees on India`s National Stock Exchange that showed a 52.65% premium. It valued the company at around 911 billion rupees ($12.3 billion).

Zomato shares are also available for trading on the BSE, India’s stock exchange, which opens at 116 rupees per unit.

As of 12:50 p.m. HK/SIN, Zomato shares sold at 130.8 rupees, which seemed slightly below an earlier session high of 138.95 rupees.

The company arranged to go public in April, announcing their plans to use the profits to support growth. Including takeovers and mergers. The company is offering 1.24 billion shares, valuing the IPO at 93.76 billion rupees. That includes issuing new shares worth more than 90 billion rupees and around 3.76 billion rupees worth of assets sold by current shareholders.

According to a report from Reuters, Zomato’s IPO brought $46.4 billion in bids last week and seemed more than 39 times oversubscribed, with serious institutional investors placing significant bets.

Zomato, besides its rival company Swiggy, dominates India’s $4.4 billion food delivery market, which looks pretty fragmented while being highly competitive.

Besides food delivery, Zomato also allows its clients to book their tables in restaurants. Also, last year, Uber decided to sell its India food delivery business to Zomato that gave the company part in the start-up. Zomato’s other famous supporters include Indian company Info Edge, Alibaba Group and Temasek from Singapore.

The Indian tech company stated that it faces serious competition from restaurants with its online ordering platforms. Other opponents include restaurants that operate delivery lines and order by phone.

Zomato is considered the first local start-up to go public, while Indian markets show their resilience despite the economic change from the pandemic.

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