Stellar DoorDash listing sets stage for Indian food delivery app Zomato IPO

Photo: Mint

Investors are on a high, with jab sessions beginning in earnest in the UK, and expected to gradually spread worldwide soon. One clear sign of the euphoria is the massive listing gains of recent IPOs in the US. DoorDash Inc., an American online food delivery services firm, had an extraordinary debut, with a listing gain of over 80% from its issue price. The company, which posted a net loss of $149 million for the nine months ended September, listed with a market capitalization of $60 billion. For perspective: private investors had valued DoorDash at $16 billion in June. Based on the IPO pricing, the firm was valued at around $32 billion.

Indian food delivery companies could well be licking their chops at potential IPO valuations. Swiggy and Zomato are being valued at $3.5 billion and $3.6 billion, respectively, based on latest reports. Using the wide divergence between the private market and public market’s perception of valuations of internet companies these days, the latter may well value Swiggy and Zomato at well over $12 billion. According to reports, Zomato is looking at an IPO in 2021. “DoorDash’s spectacular listing should have a positive influence on the valuations of Indian food delivery companies and provides a good benchmark for their listing,” said Anuj Kapoor, managing director and head of Investment Banking, UBS India.

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