The IPO of the meals aggregator noticed large curiosity from retail and institutional traders with 40 instances subscription. That means traders wager a complete of Rs 2.13 lakh crore on the Rs 9,375 crore challenge.
“We are expecting Zomato to list at 20-25 per cent premium to issue price. We recommend booking partial profit if that happens. Hold the remaining allotted shares for the long term, as the company has been gaining market share consistently over the past four years,” mentioned Asha Jain, Research Analyst at Hem Securities.
In the unofficial marketplace for unlisted shares, often known as gray market, Zomato’s unlisted shares are altering fingers at round 30 per cent premium. Grey market premium is usually thought of a superb indicator of doable itemizing good points.
The large curiosity seen within the Zomato IPO additionally confirmed that traders are usually not very involved concerning the firm’s present loss-making standing. This has additionally inspired different loss-making companies to enterprise into the share market.
Veteran worth traders, together with Rakesh Jhunjhunwala and Ramdeo Agrawal, have mentioned they might not put money into such ventures and slightly attempt to earn money in another confirmed companies. However, that isn’t discouraging different analysts.
“Losses are a concern, but investors are hoping that such companies will come into profit in 2-3 years. If Zomato fails to show any growth in, say, user base or margins, that will be a big issue,” mentioned Vinod Nair, Head of Research at
However, the probability of the latter occurring are much less, mentioned analysts. Hence, the inventory has ample progress alternatives. Nair kept away from setting any value goal for the inventory at this stage.
“If there is a market correction, then it will also come down. But if the market remains flat or keeps rising, stocks like Zomato will continue to outperform. One of the big positives with Zomato is that it would have quite a bit of cash on its books, which will give it strength to grow over the next two years,” mentioned Nair.
Lately, many corporations have entered the market with none friends. IndiaMart InterMesh, Affle India,
, Nazara Technologies, MTAR Technologies and Easy Trip Planners are a few of them. Many of them have surged quickly put up itemizing.
Some have even doubled investor cash on the itemizing day itself. Chemcon Specialty Chemicals (114 per cent itemizing achieve), Happiest Minds Technologies (111 per cent), GR Infraprojects (103 per cent), Route Mobile (102 per cent) and Indian Railway Catering And Tourism Corporation (101 per cent) are among the current names the doubled investor cash at the opening tick.