Info Edge share climbs 5% after Sebi clears Zomato IPO

Shares of Info Edge (India) rose 5 per cent on Monday after Securities and Exchange Board of India (SEBI) gave nod to the initial public offering (IPO) of the food delivery company Zomato.

Info Edge held 18.55 per cent stake in Zomato at the end of April 2021, according to Draft Red Herring Prospectus. Info Edge share has rallied 13 per cent in the last three sessions.

Info Edge (India) stock touched an intraday high of Rs 5,626 rising 4.83% against previous close of Rs 5,366. Info Edge stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

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The share has gained 16.14% in one year and risen 100% in one year.

In a month, the share has climbed 21.02%.

Total 0.55 lakh shares of the firm changed hands amounting to turnover of Rs 30.24 crore on BSE.

Market cap of the firm rose to Rs 71,209 crore.

The share hit 52-week high of Rs 5,876 on January 6,2021 and 52-week low of Rs 2,732 on July 6, 2020.

Info Edge will sell only 50 per cent, or Rs 375 crore, of the initial offer as offer-for-sale (OFS) in Zomato's IPO.

Earlier, the firm had planned to sell shares worth Rs 750 crore in IPO.

"The Committee of Executive Directors of the company, having been duly authorized in this regard, have considered and given their approval on July 4, 2021 (further to the resolution passed by the Board of Directors of the Company on April 27, 2021) for a reduction in the size of the Offer for Sale by the Company to the extent permitted under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, such that the revised Offer for Sale by the Company would comprise of such number of Equity Shares held by the Company in Zomato, as would aggregate up to Rs 375 crore, the terms and conditions of which will be specified in the red herring prospectus and the prospectus filed in relation to the Offer, and in other Offer related documents and agreements," Info Edge said in an exchange filing.

Zomato, backed by China's Ant Group, filed for the IPO in April. According to the DRHP filed by Zomato, the company will offer equity shares aggregating up to Rs 8,250 crore (nearly $1.1 billion).

Of this, Rs 7,500 crore will be fresh issue, while Rs 750 crore will be an offer for sale for its existing investor Info Edge.

Proceeds from the fresh issue will be used towards funding organic and inorganic growth initiatives, and general corporate purposes.

Zomato's FY20 revenue had jumped over two-fold to $394 million (around Rs 2,960 crore) from the previous fiscal, while earnings before interest, taxes, depreciation and amortization (EBITDA) loss stood around Rs 2,200 crore.

In February, Zomato had raised $250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at $5.4 billion.

Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited and Credit Suisse Securities (India) Private Limited are the global coordinator and book running lead manager for the issue.

BofA Securities India Limited and Citigroup Global Markets India Private Limited have been appointed as merchant bankers to the public issue.

The equity shares of the company will be listed on BSE and NSE.