Shares of food delivery app soar 80% on market debut

Shares in Indian food delivery app Zomato have soared by more than 80% in their stock market debut.

The listing was pushed forward by four days and comes as India’s stock market nears all-time highs.

The stellar performance reflected strong investor interest in internet-based start-ups that have done well during the pandemic.

In the run up to the listing some analysts raised concerns about the high valuation of the loss-making business.

Shares in the Ant Group backed app traded as high as 138.9 rupees each (£1.36; $1.87), valuing the company at about $12bn.

Zomato’s share offering last week drew bids worth $46.3bn as it was more than 38 times oversubscribed, with big institutional investors also placing major bets.

In the year to the end of March, Zomato’s losses narrowed to around $110m, even as its revenue from operations fell slightly.

The home-grown food delivery platform, which was launched in 2008, operates in about 525 cities across India and partners with almost 390,000 restaurants.

As well as delivering food, Zomato collates reviews and allows customers to book restaurant tables.

Zomato faces competition in India from SoftBank-backed Swiggy and Amazon’s food delivery service.

It is India’s first stock market listing of a so-called ‘unicorn’, or a start-up valued at more than $1bn.

The company, which is backed by Jack Ma’s Ant Group, is also the first of India’s major digital start-ups to launch shares on the stock market, although a number of others are expected to list in the months ahead.

Digital payments service Paytm, hospitality firm Oyo Hotels and ride-hailing platform Ola are among the big Indian start-ups set to make market debuts, backed by both local and overseas investors.