Zomato surges 12% after dream debut, surpasses TechM in m-cap

With this, the online food aggregator commanded a market capitalisation (m-cap) of Rs 1,10,499 crore, which exceeded the Rs 1,08,340 crore market value of the fifth-largest IT firm Tech Mahindra. Zomato was not far behind

‘s Rs 1,11,262 crore market capital.

The scrip surged 14.22 per cent to hit a high of Rs 143.75 on the BSE. It eventually closed the day at Rs 140.85, up 12 per cent.

Zomato’s Rs 9,375 crore issue had received bids for Rs 2.13 lakh crore worth shares, which were the third-highest in Indian capital history. The listing last week and the stock delivered hefty listing day gains.

While there has been a debate over the stock’s rich valuations, analysts said conventional wisdom does not work with internet companies.

said a similar pessimism was witnessed in the US about 20-25 years ago as in the Indian market today around ‘near-term’ profitability, cash flows, and valuations. It finds Zomato as a strong contender to enter Nifty50 going forward.

“Historically, customer adoption in most new product categories took a longer time of 15-25 years before it gained critical mass and companies became profitable in their respective businesses. In contrast, we find category adoption of some of the segments such as food-tech, payments, and e-commerce to be very encouraging despite their limited history of existence. For instance, we estimate healthy 16 per cent food-tech adoption outside the urban core (Next-500 towns) despite hardly 2 years of presence of Zomato/Swiggy,” it said.

A leading online food aggregator, Zomato offers a platform for connecting consumers with restaurants. On average, 3.21 crore monthly active users (MAUs) visited the Zomato platform in FY21. The company has a presence in 525 cities and has 389,932 active restaurant listings. It also had 1,69,802 active delivery partners as of March 31. Other than India, the company has footprints across 23 countries.