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#zomatoipo
#Zomato Analysis 3/8/21:
Grab a cup of coffee and enjoy my notes:
Zomato Shareholding as on July 22nd:
Promoter holding: 0%
Institutions:12.76%
Non institutions: 83.67%
(58% holding by foreign companies)
Positives First:
*Almost debt free
(1/n)
#Zomato Analysis 3/8/21:
Grab a cup of coffee and enjoy my notes:
Zomato Shareholding as on July 22nd:
Promoter holding: 0%
Institutions:12.76%
Non institutions: 83.67%
(58% holding by foreign companies)
Positives First:
*Almost debt free
(1/n)
2/n #Zomato
*Massive growth potential, Scalable.
*Current Ratio: 9.3 (Excellent)
*Strong Network in place
*Hyperlocal data
*Strong brand image
*B2C Food delivery business
*Hyperpure B2B business
*Paid Zomato Pro Membership
*Cloud Kitchen opportunity scalable
*Massive growth potential, Scalable.
*Current Ratio: 9.3 (Excellent)
*Strong Network in place
*Hyperlocal data
*Strong brand image
*B2C Food delivery business
*Hyperpure B2B business
*Paid Zomato Pro Membership
*Cloud Kitchen opportunity scalable
3/n #Zomato
*All in one platform business for food restaurant search, menu, ordering, payments, online track delivery, feedback, customer support.
*35 subsidiaries (including Zomato's abroad businesses)
*Possibility to replicate their food delivery success to new businesses.
*All in one platform business for food restaurant search, menu, ordering, payments, online track delivery, feedback, customer support.
*35 subsidiaries (including Zomato's abroad businesses)
*Possibility to replicate their food delivery success to new businesses.
Today: IPO Corner - day 3 of bidding, & more
The markets closed in the red today. Realty, metal, and pharma stocks were the top performers while IT dragged the indices down. 
#ZomatoIPO was subscribed 38.25 times at the end of day 3 of bidding.
The IPO received 2,751.25 crore shares against an offer size of 71.92 crore shares.
The IPO received 2,751.25 crore shares against an offer size of 71.92 crore shares.
However, despite all this, Zomato’s valuation grows from $ 3 BN to 8.6 BN in 18 mths. Now that’s an innovation at Zomato that I’m not willing to pay for. I’m sure they’ll find many who would like to own “fools gold”. I’ll pass.
Zomato listing – Follow up:
So what does an analyst do when listing surprises everyone. Well, he digs more.
At PE of 350, #ZomatoIPO beats DoorDash of US hands down. And we thought DoorDash is overpriced at PE of 143. Is it pricey?
So what does an analyst do when listing surprises everyone. Well, he digs more.
At PE of 350, #ZomatoIPO beats DoorDash of US hands down. And we thought DoorDash is overpriced at PE of 143. Is it pricey?
Hell yes, it is VERY pricey. And if possibilities are immense, why did sales stay flat for last 3 yrs? What did we miss here? Takes us to the listing dynamics & why most stocks decline post listing pop phenomenon. Let's see some details.
1)#ZomatoIPO : LONG THREAD: Once in a decade opportunity…. for some?
Is the IPO the golden opportunity for investors, as claimed by many? How much appreciation can one expect? A multi-year holding story or just a listing pop. This time it’s different, or is it? Let’s evaluate:
Is the IPO the golden opportunity for investors, as claimed by many? How much appreciation can one expect? A multi-year holding story or just a listing pop. This time it’s different, or is it? Let’s evaluate:
The authorized share capital of the Company is divided into 880 crore Equity Shares of face value Rs 1 each, paid-up share capital of the Company is Rs 666 crore.
IPO size: Rs 9,350 crore or $ 1.3 BN USD
Valuation of Zomato : Rs 66,000 crore or $ 8.8 BN USD
Ownership as below
IPO size: Rs 9,350 crore or $ 1.3 BN USD
Valuation of Zomato : Rs 66,000 crore or $ 8.8 BN USD
Ownership as below
Start with the balance sheet: We see B/S size increased almost 3 times in FY 21 vs FY 20. The equity infusion of Rs 7,643 cr in FY 21 just before IPO is not co-incidental? While this is not unusual for growth companies, this quantum change has an implications for shareholders.
Reading about #ZomatoIPO surprised me by how perfectly Zomato fits in the Amazon Flywheel that Jeff Bezos infamously drew on a napkin in 2001.
A thread🧵👇 (1/10)
A thread🧵👇 (1/10)
Sometimes referred to as the "Virtuous Cycle," this diagram explains that success starts with customer experience.
A good customer experience will attract more customers.
More customers will bring more 3rd party sellers. More sellers give more offerings to customers. (2/10)
A good customer experience will attract more customers.
More customers will bring more 3rd party sellers. More sellers give more offerings to customers. (2/10)
This process will create a positive cycle that will provide growth, ultimately lowering the price of products and boosting innovation.
So, how does well does Zomato fit into this flywheel?
Let's start with Customer Experience. (3/10)
So, how does well does Zomato fit into this flywheel?
Let's start with Customer Experience. (3/10)
My thoughts on the Zomato IPO
The company’s biggest value add in my understanding isn’t delivery. If you value it as a delivery company, you’re doing it fundamentally wrong. The moat is logistics, marketing and service quality.
#ZomatoIPO #Zomato #IPO
The company’s biggest value add in my understanding isn’t delivery. If you value it as a delivery company, you’re doing it fundamentally wrong. The moat is logistics, marketing and service quality.
#ZomatoIPO #Zomato #IPO
Zomato is a marketing company where cloud kitchens and delivery places will pay for marketing and discovery. Established restaurants have spent 30% of revenues on marketing for years. A big chunk of similar marketing spends will go to Zomato and Swiggy.
Another big thing is that now most of the places that are on Zomato are restaurants. This ratio will change in favour of delivery and cloud kitchens who will have much better margins because of location and eating space not being a factor. They benefit from Zomato and vice versa.
