Zomato Surges 65% in India Stock Market Debut

Zomato's Successful Public Debut and its Impact on the Indian Startup Ecosystem

The shares of Zomato, a food delivery company based in Gurgaon and a pioneering Indian consumer tech startup to become publicly listed, experienced a significant increase in value on its first day of trading in Mumbai. This surge provides valuable insight into investor interest in the rapidly expanding startup landscape within the world’s second-largest internet market.

Initial Trading Performance

Throughout the trading day, Zomato’s stock price remained above the initial offering price of 76 Indian rupees ($1). It reached a peak of 138.9 Indian rupees ($1.87). The company concluded its first day on the BSE in Mumbai at 125.8 Indian rupees ($1.69), resulting in a market capitalization of $13.2 billion. This represents a substantial increase from the $5.4 billion valuation achieved during earlier fundraising efforts this year.

The initial public offering (IPO) of $1.3 billion was oversubscribed by a factor of 40 last week, demonstrating strong demand.

Industry-Wide Significance

Zomato’s successful listing is considered a landmark achievement for the entire industry. Startup founders and investors closely monitored the company’s stock performance. Social media platforms, particularly Twitter in India, were filled with congratulatory messages from industry peers on Friday.

Ashish Dave, the India head of Mirae Asset – a Zomato investor – stated that the listing and performance of Zomato have provided a crucial element of liquidity to the Indian startup ecosystem.

He explained, “This confirms the possibility of generating substantial IPOs, which subsequently enhances the attractiveness of Indian startups to global limited partners. It also allows Indian investors to actively participate in the growth of the Indian tech sector, rather than merely observing it.” He further added that this generation’s retail investors will now have an opportunity to invest in brands they recognize and have grown alongside.

Acknowledgement from Zomato's CEO

Deepinder Goyal, Zomato’s chief executive, promptly acknowledged the support received. In a blog post, Goyal described the day as “a new Day Zero” and emphasized the collective contribution of India’s internet ecosystem.

He credited Jio’s expansive growth for enabling unprecedented scale and acknowledged the foundational work of companies like Flipkart, Amazon, Ola, Uber, and Paytm in building the infrastructure for future innovation.

Goyal stated, “It takes a village to raise a child, and we are no exception. Hundreds of people have selflessly contributed to making Zomato what it is today.”

Increased Investment and Future IPOs

Indian tech startups have secured a record amount of funding this year, driven by increased investment from prominent investors in the South Asian market. Swiggy, Zomato’s primary competitor in India, recently announced a $1.25 billion funding round from SoftBank’s Vision Fund 2 and Prosus, achieving a valuation of $5.5 billion.

Several other companies are also preparing for public listings in the coming months. Financial services firms Paytm and MobiKwik have already filed for their IPOs this month. Policybazaar, an online insurance aggregator, is anticipated to submit its paperwork within weeks.

Looking Ahead

Goyal concluded with a hopeful outlook, writing, “I don’t know whether we will succeed or fail – we will surely, like always, give it our best. But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have, and build something way more incredible than what we can dream of.”