Started in 2008, Zomato is India's largest hyperlocal delivery networks, based on number of delivery partners as of March 31, 2021, according RedSeer, with 1,69,802 active delivery partners in the month of March 2021. Company's products are highly personalized, intuitive, simple to use, visually appealing and are designed to drive high engagement with its customers. The products refer to its website and mobile applications catering to its offerings to all three of company's stakeholders, customers, restaurant partners and its delivery partners. Company's delivery partners are able to accept orders, see their per order earnings and estimate the time and navigate to restaurants' location and point of delivery using the mobile application. The customers are also able to record and save voice instructions for the delivery partners to reach the point of delivery without intervention through voice call or messages, thus creating a seamless delivery experience. The machine learning driven algorithms are able to forecast demand, optimize fleet utilization and batch orders. The company build relationships with restaurant partners through the offline on-field sales force. The company enter into legally binding agreements with restaurant partners who elect to purchase its services, such as advertisement, food delivery, Hyperpure, among others. The creation of listings on company's platform is free of charge. The company operates its businesses primarily through arrangements with the restaurant partners, delivery partners, other intermediaries such as call center operators who assist in customer service operations and wallet and payment gateway operators to facilitate payment on company's platform. In addition, the company has also entered into an agreement with a global data management system service provider for primarily hosting of the platform, billing, collection of payments and data storage. We operate our businesses primarily through arrangements with our restaurant partners, delivery partners, other intermediaries such as call center operators who assist in customer service operations and wallet and payment gateway operators to facilitate payment on our platform. In addition, we have also entered into an agreement with a global data management system service provider for primarily hosting of our platform, billing, collection of payments and data storage. As per financial performance, Zomato has posted total income/net profits (loss) of Rs. 487.04 cr. / Rs. (104.08) cr. (FY18), Rs. 1397.72 cr. / Rs. (1013.14) cr. (FY19), Rs. 2742.73 Cr. / Rs. (2362.80) Cr. (FY20) and Rs. 2118.42 Cr. / Rs. (822.28) Cr. (FY21). So company has posted consistent high growth in sales, but loss is also very high. In FY21, due to pandemic sales decreased as there was lock down in most of the Indian cities. Company has posted an average EPS of Rs. (2.99) and average RoNW of (49.09)% for last three fiscals. Issue is priced at a P/BV of 5.04 as per NAV of 15.09 on 31.03.21. Company has posted loss, so there is no point in calculating P/E ration. As per RHP, there is no listed peers. On BRLM's front, five BRLMs are associated with this IPO, and have handled around 24 IPO in last three fiscals. From last 10 IPOs, 3 are opened below issue price and remaining are opened above issue on the day of listing. As of now, one is trading below and other are trading above issue price. ( As on 08.07.21) As per financials, company has shown good growth in sales, RoNW and P/E are negative as company is making losses consistently. In current pandemic situation, sales of company declined. This is a technology driven service company with unique business model and has very huge growth potential, but its also important to see when company will start making profits. Performance of BRLM is good. So, we are giving SUBSCRIBE rating to this IPO for listing gains and aggressive investors can hold for long term.
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