Online food ordering platform Zomato’s initial public offering (IPO) is less than a week away, but its shares are already selling on a strong premium in the grey market. The company will allow subscriptions on July 14 and close on July 16, with the allotments being finalised by July 22.
The price band for the shares has been fixed at Rs 72-76. A total of Rs 9,000 crore worth of fresh equities will be issued along with a Rs 375 crore offer for sale by existing investor Info Edge India Limited, which is Zomato’s largest shareholder.
Zomato’s shares are currently being sold at a premium of Rs 16-20, according to IPO Watch and IPO central. This translates to a 26 percent grey market premium (GMP) on the maximum price band. Analysts and experts predict a good performance for Zomato in the IPO based on the current GMP, which is expected to increase as the IPO date approaches closer.
Grey market refers to the unofficial market where shares are traded along with other financial securities. A strong grey market performance suggests an excellent IPO for the company.
“We like technology companies, there is a lot of scale on technology. I would personally invest primarily because it is a tech-led business — the apps give you the ability to track your deliveries – these things change the industry dynamics, so I would love to invest,” said Deepak Shenoy, founder of Capitalmind, a Bengaluru-based portfolio management service.
Investors can purchase lots of 195 equity shares, for a minimum investment value of Rs 14,820 and a maximum of 13 lots for a maximum investment value of Rs 192,660.