BSE Sensex went up by 0.20% to close at 52,587 in July 2021. Nifty 50 closed at 15,763 higher by 0.26% from 15,722 in June closing.
Foreign Portfolio Investors (FPIs) divested Rs. 11308 Crore from the Indian equity markets in the month of July.
Amongst the BSE indices Realty (16.12%) and Metal (12.57%) and Basic materials (10.61%) were best performers while Auto, Power and Oil and Gas was in red.
Real estate sector hit a 10-year high in July 2021. Some of the factors that contributed to the rise in increased realty demand include work from home due to COVID-19 which led families to buy big houses, low interest rates and decreased stamp duty in certain states.
Primary market update:
There were 5 main board IPOs of Tatva Chintan Pharma Chem Limited, G.R. Infraprojects Limited, Clean Science and Technology Limited, India Pesticides Limited along with blockbuster IPO of Zomato Limited in July 2021 as against 4 main board IPOs in June 2021.
There were 2 SME IPOs of AA Plus Tradelink Limited and Focus Business Solution Limited in July 2021 as against 3 SME IPOs in June 2021.
Initial Public Offers:
- Zomato made history by becoming first Indian Unicorn start-up to launch a blockbuster IPO.
- Founded in 2008 as Foodiebay, Zomato Limited is an online restaurant guide and food ordering platform.
- Zomato has established itself across 23 countries with 131,233 active food delivery restaurants, 161,637 active delivery partners and an average monthly food order of 10.7 million customers.
- Its IPO had a price band of Rs.72-76 per share and size was Rs.9375 crore.
- There was a lot of discussion about the Valuation of the company at the time of IPO as many analysed that the valuation was steep.
- According to valuation expert Ashwath Damodaran the company was overvalued. As per his detailed calculations the present value of equity was closer to value per share of Rs.41 for Zomato. He however noted that company has market potential and the Indian food delivery market was going to be a 2 or 3 player market where Zomato will certainly hold its place.
- An argument by many that company is still a loss making and cash-burning enterprise however was not a valid argument since most start-ups are still in their habit-forming stage.
- Anyway, the IPO was a very successful one and subscribed 38.25 times and opened at Rs.115 per share on BSE at 51% premium.
- After listing, the market capitalization of Zomato was at Rs.1,08,067 Crore.
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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