Even though Zomato’s value has surged 5 times from $5 Bn to over $25 Bn in the last 2 years, but I believe we are missing the biggest point!
The more relevant and most underappreciated fact is that the rise has happened when roughly 40% of its total equity was actually being sold by pre-IPO investors/owners in open market! Ownership of Uber, Alipay, Tiger Global Management, Sequoia and more have fallen to 0% or at below 1%. Just last week, Antfin sold its 2.12% stake in Zomato.
India has never seen a similar circumstance before, where a listed entity has continuous supply of shares being dumped in the market, adding to its free float, but the share prices doesn’t stop rising & goes on to become part of ‘Top 50’ most valued listed entity in the same time frame.
𝐐: 40% was sold, did the retail investors buy it?
𝐀𝐧𝐬: NO! The share of individual investors have actually fallen from 9.88% two years ago to 8.67% today.
Then WHO BOUGHT IT?
INSTITUTIONS! (The FPIs now own 55% of Zomato, includes Govt. of Singapore, Canadian Pension Fund, etc., and many domestic MFs which collectively own 13%) – Detailed analysis of this coming soon.
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