Shares in Indian food delivery app Zomato have soared by more than 80% in their stock market debut. The listing was pushed forward by four days and comes as India’s stock market nears all-time highs.
The stellar performance reflected strong investor interest in internet-based consumer start-ups that are expected to do well in the pandemic.
In the run up to the listing some analysts raised concerns about the high valuation of the loss-making business.
Zomato’s share offering last week drew bids worth $46.3bn as it was more than 38 times oversubscribed, with big institutional investors also placing major bets.
Ahead of the stock market debut Zomato’s founder Deepinder Goyal tweeted “The future looks exciting. I don’t know whether we will succeed or fail – we will surely, like always, give it our best.”
In the year to the end of March, Zomato’s losses narrowed to around $110m, even as its revenue from operations fell slightly.
It is India’s first stock market listing of a so-called ‘unicorn’, or a start-up valued at more than $1bn.
The company, which is backed by Jack Ma’s Ant Group, is the first of India’s major digital start-ups to launch shares on the stock market, with more of them expected to do the same in the months ahead.
The home-grown food delivery platform, which was launched in 2008, operates in about 525 cities across India and partners with almost 390,000 restaurants.
As well as delivering food, Zomato also collates reviews and allows customers to book restaurant tables.
Its biggest competitors in India include SoftBank-backed Swiggy and Amazon’s food delivery service.