Zomato delivers to Dalal Street

For over a decade, Zomato has delivered pizza, biryani and more to millions across India. On Friday, Dalal Street got its first taste of the food delivery giant. Going by the stock’s performance on day one, investors are still hungry.


Also in this letter:

  • Setback for Amazon, Flipkart on CCI probe
  • K’taka HC quashes police notice to Twitter MD
  • Tesla lobbies India for lower import taxes

Tomorrow in ETtech Unwrapped, our weekly newsletter, we delve deep into Zomato’s historic debut on India’s stock exchanges. Subscribe to the newsletter here.

Zomato’s stock soars on day 1

Zomato Ltd., the food-delivery and restaurant-discovery platform, made a blockbuster debut on the stock exchanges on Friday, as its shares surged by as much as 83% above the IPO price of Rs 76.

Shares of the Gurugram-based firm listed at Rs 115 apiece—a premium of more than 50% over the issue price—and rose to the day’s high of Rs 138, giving the company a market cap of well over Rs 1 lakh crore. The stock pared some of these gains to end the first day at Rs 125.3.

Zomato Listing

Zomato vs Others (1)

Bumper IPO: Zomato’s shares debuted on the markets a week after its July 14-16 initial public offering was subscribed 40.38 times, generating demand of Rs 2.13 lakh crore—the most for an IPO in 11 years and the third highest in Indian capital market history.

  • The portion of shares reserved for qualified institutional buyers was subscribed 54.7 times.
  • The portion of shares reserved for non-institutional investors was subscribed 34.8 times.
  • The retail portion was subscribed 7.9 times, while the portion for Zomato employees was undersubscribed.

Day Zero: For cofounder Deepinder Goyal, Zomato’s market debut marks a fresh start—or Day Zero, as he put it in a blogpost before the opening bell.

  • “Today is a big day for us. A new Day Zero. But we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem,” he wrote in the blogpost.

As a publicly traded company, Zomato will be subject to increased scrutiny, but Goyal said the company’s focus remains on building for the long-term.

  • Zomato is going to relentlessly focus on 10 years out and beyond, and is “not going to alter our course for short-term profits at the cost of long-term success…”, he said.
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Goyal also took the opportunity to thank long-time investors and former employees, including cofounder Pankaj Chaddha, who has moved on from the company.

“They say it takes a village to raise a child, and we are no exception. Hundreds of people have selflessly played a part in making Zomato what it is today,” he wrote.

Info Edge’s bumper returns: Info Edge (India) Ltd—the earliest and biggest backer of Zomato—has seen the value of its stake in the company skyrocket to Rs 15,000 crore—or 1,050 times its initial investment of Rs 4.7 crore.

  • Info Edge first invested in the company in 2010 and held 18.5% before the listing.
  • It sold around 2.32% of its stake, or 4.93 crore shares, as part of the offer for sale.
  • It continues to hold around 15.23% stake, valued at Rs 15,000 crore as of July 23.

Info Edge’s founder Sanjeev Bikhchandani took to Twitter to talk about the returns that the company made from its investment in Zomato.

Side note: Zomato’s market cap is Rs 30,000 crore higher than that of Info Edge.

Setback for Amazon, Flipkart on CCI probe

A division bench of the Karnataka High Court has dismissed appeals filed by Flipkart and Amazon India to halt a probe by the country’s competition regulator, dealing a significant setback to the two ecommerce platforms.

What’s the case? Walmart-owned Flipkart and Amazon India had appealed to the bench to overturn an earlier ruling that had paved the way for the Competition Commission of India (CCI) to investigate the practices of both the companies.

Latest order: Terming the appeals by Flipkart and Amazon India as “devoid of any merits and substance”, the bench said they deserved to be dismissed. The ecommerce firms should not be wary of the probe if they haven’t violated any antitrust laws, judges Satish Chandra Sharma and Nataraj Rangaswamy noted.

Flipkart and Amazon India had filed separate appeals but they were heard together.

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The reaction: Following the court order, people aware of the companies’ thinking told ET that both Flipkart and Amazon India are likely to approach the Supreme Court challenging the latest ruling. “It is safe to think the matter will now get challenged there,” said a source.

Tweet of the day

K’taka High Court quashes UP police’s “arm-twisting” notice to Twitter MD

Twitter India MD

Twitter India MD Manish Maheshwari

The Karnataka High Court has quashed the notice issued by Uttar Pradesh police to Twitter India MD Manish Maheshwari that summoned him to appear in-person for questioning over a viral video that showed an elderly man being attacked in Ghaziabad.

A single judge bench of Justice G Narendar ruled that the notice, issued under Section 41(A) of the Code of Criminal Procedure (CrPC), was done without jurisdiction.

The court called the notice an “arm-twisting” technique by the UP police after Maheshwari refused to heed a previous notice summoning him.


  • On June 24, the Ghaziabad police summoned Maheshwari to the Loni Border Police Station in connection with an FIR filed against Twitter Inc, Twitter, him and others in the viral-video case.
  • The UP police alleged that the circulation of the video had “resulted in violence” in the state, and that it had summoned Maheshwari as he was Twitter’s representative in India.
  • The Karnataka High Court restrained the UP police from taking any coercive action against Maheshwari, passing an interim order granting him relief in the case.
  • Lawyers representing Maheshwari submitted to the court that Twitter Inc. does not have any shareholding in Twitter Communications India Pvt. Ltd, and is therefore a separate entity, which does not have any control over the platform.

Tesla lobbies India for lower import tax

Tesla India

Tesla Inc. has written to Indian ministries seeking a big reduction in import duties on electric vehicles (EVs), a move it says will boost demand and generate revenue for the government, two sources told us.

  • Its pitch, however, is likely to face resistance from the Modi administration, which has championed high import taxes as a way to boost local manufacturing.
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Tesla, which aims to begin selling its cars in India this year, said in a letter to ministries and the Niti Aayog that slashing federal taxes on imports of fully assembled electric cars to 40% would be appropriate.

  • This compares with current rates of 60% for cars priced below $40,000 and 100% for those above $40,000.
  • According to Tesla’s US website, only one model—the Model 3 Standard Range Plus—is priced below $40,000.
  • Just 5,000 of the 2.4 million cars sold in India last year were electric and most were priced below $28,000.

Tesla registered a local company in India in January and has ramped up local hiring while also scouting for showroom space.

Info Edge boosts Naukri with DoSelect purchase

Info Edge (India) Ltd.—which backs companies such as Naukri.com and Zomato Ltd.—has acquired HR technology startup DoSelect for Rs 21 crore, according to a statement released on Friday.

“The acquisition will further strengthen Info Edge as a leader in the recruitment sector with a sharp focus on tech-based, end-to-end hiring solutions,” the company said.

  • Started by Iliyas Shirol and Rohit Agrawal in 2015, DoSelect deploys an assessment platform that enables data-driven decisions in hiring, skilling, upskilling and employee engagement.
  • It has more than 150 customers across sectors. Notable ones include Capgemini, Fractal Analytics, PhonePe, UpGrad, Hexaware, Simplilearn and DXC.
  • The company counts Mumbai Angels, 3one4 Capital, Aarin Capital and InMobi’s cofounder Mohit Saxena among its seed investors.

The proposed acquisition would help Info Edge offer a new range of services under its flagship brand Naukri.com and help the company further consolidate its position.

ETtech Deals Digest

Food delivery platforms made headlines this week. While Zomato became the first new-age unicorn to list on the Indian stock exchanges, its rival Swiggy raised $1.25 billion from investors including SoftBank.

Meanwhile, omnichannel eyewear retailer Lenskart closed a $220-million funding round led by Singapore’s sovereign wealth fund Temasek Holdings and Falcon Edge Capital. (read more)

deals digest

Today’s ETtech Top 5 newsletter was written by Tushar Deep Singh and edited by Zaheer Merchant in Mumbai. Graphics by Rahul Awasthi.



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