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ZOMATO'S
ZOMATO'S
RIDE
RIDE TO
TO IPO!
IPO!
Today's Special Menu - Industry
Overview, Key Metrics, Valuations and
all that you need to know before
www.finkrypt.in investing in Zomato IPO!

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Industry Overview
Growing GDP, rising discretionary spend and less
penetration of restaurant food in total food market
(10% compared to 54% and 58% in US and China)
presents a huge opportunity for Online Food
delivery market to grow in India.

Metrics India China USA

Population (Crores) 136 143 33
Internet Access/Population 43% 63% 88%
Online Food Delivery Users (Cr.) 4.5 to 5.5 43 to 47 9 to 12
Online Food Delivery Users/
Access to Internet 9% 50% 36%
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Avg. order value (INR) 300 487.5 2850
Revenue/order (INR) www.finkrypt.in
97.5 67.5 600
Gross margin (%) 24% 21% 56%
Delivery cost (INR) 75 52.5 262.5
Order per user/ per year 15 28 40
Delivery penetration (%) 6% 26% 49%

Key Players & their 47%

Market Share 45%
65%
22%
35%
45% 18%

Souce: CLSA Report, Zomato DRHP

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Indian picture & Key

Operating Metrics for Zomato
Having Captured almost half the market, still it
has not turned profitable, however EBITDA
Margins have improved. The threat of new
competitors and from cloud kitchen will remain
never-ending.

FY18 FY19 FY20 9M'21

Montly Average
1.38 2.93 4.15 2.96
Users (Crs)
Monthly Transacting
0.09 0.56 1.07 0.58
Users (Crs)
Active Food Delivery
33,192 94,286 1,43,089 1,32,769
Restaurants
Gross Order
1,334 5387 11,221 6.169
Value (Crs)
Average Order Value 436 282 278 397

Orders (Crs) 3.06 19.1 40.3 15.5

EBITDA (Crs) -78.4 -2,143 -2,206 -204

Souce: CLSA Report, Zomato DRHP

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The Valuation game of Zomato

Interestingly, Zomato was approached by its first
investor InfoEdge as the founder of InfoEdge when
used the app, he found it very fascinating. The seed
funding was of INR 4.6 Crs. The average share price
for Info Edge is Rs.1.16 and now they will exit half of it
at Rs.76, a return of over 6500%.
IPO

RIDE TO IPO!
Fidelity,
Tiger Global

Mirae, Tiger
Global, etc

www.finkrypt.in Ant
Amount Raised in Cr (LHS) Financial
Per Share Price (RHS)
Lead Investor Ant
Financial
Vy Capital,
Temasek Ant
Financial
InfoEdge,Vy
Sequoia India, Capital, Sequoia
InfoEdge
InfoEdge

Aug-10 Nov-13 Nov-14 Apr-15 Sep-15 Feb-18 Oct-18 Jan-20 Aug-20 Feb-21 Jul-21
Souce: Zomato DRHP
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Per Unit Economics of Zomato

The continued efforts to make company profitable
has led unit economics improving continuously and
it has finally become positive.

FY2020 Unit Economics (₹)

15.3 (52) Revenue
Cost
43.6
(21.7)
(15.7)

(30.5)

Commission Customer Delivery Discounts Other Contribution

and Other Delivery Cost Variable (Profit/Loss)
Charges Charge Cost

9M FY2021 Unit Economics (₹)

26.8 (44.6) Revenue
Cost

62.8
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(7.3) (14.8)
22.9

Commission Customer Delivery Discounts Other Contribution

and Other Delivery Cost Variable (Profit/Loss)
Charges Charge Cost

Souce: Zomato DRHP

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Global Peers

INDIA CHINA USA USA

Market Cap
50,623 16,36,743 4,37,435 1,38,704
(₹ Crs)

Montly Average
2.96 6.4 0.5 3.14
Users (Crs)

Sales (₹ Crs) 2,604 1,31,993 21,602 13,408

Price/Sales 19.44 12.40 20.25 10.34

Zomato is seeking a valuation of around 50,600

Crore as it looks for expansion. The fresh issue is of
9000 crore and 375 crore is OFS (Info Edge selling half
of its stake). The price band is fixed at 72-76.

The Price/Sales is around 20 which is expensive

compared to global peers but given it a tech
company and with huge addressable market, this
issue can still garner investor’s interest.

Souce: CLSA Report, Zomato DRHP

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Key Valuation
Driver & Analysis
Well, gray market premiums are between INR 14-18.
But here's what can drive or drag the valuation:

What can drive valuation?

Improving per order economics leading to better

EBITDA margins
Increasing penetration of internet users and
online food Industry

What can drag the valuation?

MAU have fallen by almost 23% in FY21 due to

pandemic and still way below pre-pandemic
level
Average order value has also come down
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