India Business and Finance Update
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Zomato, a food delivery company and India’s first publicly-listed technology group, saw its stock price rise by 80% when it debuted, which is an important test for investors’ appetite for the country’s money-burning start-ups.
Zomato’s share price surged from an issue price of 76 rupees to a high of 138.90 rupees (US$1.87) in early trading on Friday, at a valuation of approximately US$12 billion. The initial public offering received approximately 40 times the subscription and has been closely watched by many other highly valued companies. Expected to be listed In the next few months.
India’s fast-growing technology group has previously relied on foreign venture capitalists to provide funding for its often loss-making business. However, regulatory changes have allowed unprofitable companies to go public, which has prompted several start-ups, led by Zomato, to turn to the open market.
SR Srinivasan, an independent investment consultant, said: “In my memory, this is the first company in India that has an IPO in India and has not achieved profitability.” “It shows the maturity of the market. Hope this will be positive, but I am very cautious.”
This is an A lively year The Indian stock market followed the global stock market to set a record this year. The Sensex index of the Bombay Stock Exchange has climbed more than 10% and hit a record high last week.
Refinitiv data shows that bullish sentiment has encouraged a series of listings, and the company raised $3.9 billion in the first half of 2021, the highest level since the global financial crisis.
Zomato’s IPO is the largest IPO in more than a year, closely followed by New Delhi-based payment group Paytm. Submit draft prospectus last week. Like Zomato, Paytm is also supported by the Ant Group of Chinese billionaire Jack Ma. It is also at a loss.
It is believed that several other Indian technology groups are also waiting, including Wal-Mart’s E-commerce group Flipkart.
Supporters hope that this series of listings will give stock investors the opportunity to participate in the development of the Indian technology industry, just as American shareholders enjoy through companies such as Amazon or Facebook.
They also bet that Indian companies will indirectly benefit from Regulatory crackdown Chinese technology groups may prompt global investors to look for opportunities elsewhere.
After raising US$4.4 billion in the IPO in New York last month, the Chinese authorities conducted a data security investigation on the ride-hailing business Didi, which caused a plunge in Chinese technology stocks and threatened Lucrative market For Wall Street Bank.
But Zomato and its peers also face their own challenges.On the one hand, the analyst is Suspect ZomatoAccording to the report, a net loss of 110 million U.S. dollars in the year ended in March is likely to be profitable.
Due to the increase in food delivery groups during the coronavirus pandemic, their economic conditions have improved, but the value of orders is still low by global standards. Some analysts believe that as the Covid epidemic subsides and people resume eating out, the mark may decline further.
Zomato’s takeaway competitor, Swiggy, raised US$1.25 billion this week from investors including SoftBank’s Vision Fund 2 and South Africa’s Naspers’ investment arm Prosus, which is listed in the Netherlands, for a valuation of US$5.5 billion.
Indian technology companies must deal with their own regulatory challenges, because the government wants to foreign investment.
The government introduced restrictions last year, requiring investors from China to seek official approval, which prevented Zomato from obtaining New financing from Ant Financial.
“There is a lot of capital inflows. But we have to look at the fundamentals: Is there profitability and is the company good?” said Roopa Venkatakrishnan, director of Sapient Wealth Advisors and Brokers in Mumbai.
“Due to the way of business, profitability may last for two, three, or four years. But this is something that people must invest in for a long time,” she said. “Today, with ecstasy, people are investing in a very short-term perspective.”
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