Zomato IPO Review & Recommendations

Zomato IPO Review by Dilip Davda (Avoid)

[Dilip Davda]  The rationale is given in PREFACE and the negative P/E makes this mega primary offer a costly bet. Earlier two loss-making food chain IPOs of Burger King and Barbeque Nation have rewarded investors in the medium term, but they were in the hotel sector that enjoys good margins, whereas this company is purely dependent on third party supply and is primarily in the food delivery business. This being the first mover in the segment, its listing performance hinges on ongoing uncertainty and the future prospects. National Restaurant Association of India (NRAI) moving Competition Commission of India (CCI) for level playing field between restaurants and online food aggregators is a major concern for a while. Being mega offer, chances of allotment are higher. There is no harm in skipping this IPO with inflated valuations. Read detail review...