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As we already know of the upcoming Zomato’s public listing, and the company is busy with the pre-IPO processes. Just before that, the company was converted from a private company to a public limited company regulatory filings show.
The sources say Zomato has passed a special resolution on April 5 to take this step, amending the Memorandum of Association, and remaining the firm as Zomato Limited from April 09, 2021.
One of the excerpts of the filings states that- “The company is considering filings of the draft red herring prospectus with the Securities and Exchange Board of India and relevant stock exchanges and listing of the equity shares on one or more of the stock exchanges. Hence, to undertake the same, the company is required to be converted into a public limited company”.
Moreover, the Companies Act 2013, only public limited companies can list with any stock exchange. And that’s why Zomato has converted itself to fulfill all the needed legal criteria before listing for a smooth further process.
Besides this, the company has also allotted 44,30,60,73,250 equity shares to all of its preference shareholders upon conversion of the CCPS which was held by them. This also includes all investors, promoters, ESOPs trust, and more.
Separately, Zomato has passed one more special resolution to issue 277,60,30,788 equity shares to existing stakeholders in a ratio of 6699:1. And it has also capitalized INR 235.4 crore from its security premium account to facilitate this allotment.
This recent allotment has been made to 17 shareholders with Fidelity Group, InfoEdge, Depinder Goyal, Pankaj Chaddah, ESOP Trust, and Temasek as among the big beneficiaries.
The researchers and analysts say these moves are in line with Zomato’s new plan to list in a few coming weeks. As per the three Entracker sources, it has already finalized bankers for its public listing and plans to file a draft red herring prospectus or DRHP next week.
One of the sources stated, who requested to keep further information to be private- “Kotak Mahindra Bank, Morgan Stanley, Citi Bank, Credit Suisse, and Bank of America have been finalized as bankers for the coming IPO (Initial Public offering) and more”.
Also, it has refused to offer comments for the story while queries were sent to Kotak Mahindra Bank, Citi Bank, Credit Suisse, Morgan Stanley, and Bank of America, but didn’t elicit any immediate response.
This IPO would be the first mega listing from an Indian startup ecosystem in 2021. As per the media reports, the firm is eyeing rising to $1 billion at a valuation of $6 to 8 billion funds.
Importantly, the firm had said that only primary capital would be raised via the listing. Since, 2020, the firm has mopped up close to $910 million from Tiger Global, Kora, Fidelity, and several others across several tranches of its Series J round.
Update- Food Delivery Platform likely to file DRHP on 23 April 2021
After becoming Public Limited, Zomato likely to file a DRHP (Draft Red Herring Prospectus) with the market regulator on April 23. It’s the move towards executing India’s most anticipated internet IPO (initial public offering) in a vociferous year.
One of the spokespeople said The company’s internal review of the IPO and other relevant processes was completed yesterday (22 April, Thursday). And to move forward, the SEBI will take about 2 weeks to review the DRHP and the final launch will depend on the market conditions and other factors.
In case you are not aware of what is a DRHP, then it is an exhaustive account of the vital details of a company, involving the date of incorporation, description of the business model, risks, and other details. It is the first document that a firm files with SEBI, which wants to list its shares on a stock exchange.
As we already know how Zomato seeing heightened funding activity, and right after the exponential growth rate the firm decided to come up with an IPO on US listing. This year witnessed 11 startups and budding ventures becoming Unicorns, in only 4 months of 2021, and there’s a whole year ahead, let’s see what all is there to come!
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