Exclusive: Ahead of IPO, Zomato becomes public limited company and finalises bankers

Zomato’s public listing is around the corner and the company is busy in the pre-IPO processes. To that effect, the company’s holding entity has been converted from a private company to a public limited company, regulatory filings show.

Zomato passed a special resolution on April 5 to take this step, amending the Memorandum of Association (MoA) and renaming the company as Zomato Limited from April 09, 2021.

“The company is considering filings of the draft red herring prospectus with the Securities and Exchange Board of India and relevant stock exchange(s) and listing of the equity shares on one or more of the stock exchanges. In order to undertake the same, the company is required to be converted into a public limited company,” reads an excerpt of the filings.

As per the Companies Act 2013, only public limited companies can list with any stock exchange, hence Zomato has converted itself to fulfil the legal criteria before listing.

Apart from the name change, the company also allotted 44,30,60,73,250 equity shares to all of its preference shareholders upon conversion of the CCPS (Compulsorily convertible preference shares) held by them.  This includes all investors, promoters, ESOPs trust and so on.

Separately, Zomato has passed another special resolution to issue 247,60,30,788 equity shares as bonus shares to existing shareholders in a ratio of 6699:1. The company has capitalised Rs 235.4 crore from its security premium account to facilitate this allotment.

The allotment has been made to 17 shareholders with InfoEdge, Fidelity Group, Deepinder Goyal, Pankaj Chaddah, ESOP Trust and Temasek as big beneficiaries.

Analysts say these moves are in line with Zomato’s plan to list in a few weeks from now. According to three Entrackr sources,  Zomato has finalised bankers for its IPO and plans to file a draft red herring prospectus or DRHP next week.

“Kotak Mahindra Bank, Morgan Stanley, Citi Bank, Credit Suisse and Bank of America have been finalised as bankers for the IPO and more banks could be added,” said one of the sources requesting anonymity as the information is private. 

Zomato has declined to offer comment for the story while queries sent to Kotak Mahindra Bank, Morgan Stanley, Citi Bank, Credit Suisse and Bank of America didn’t elicit any immediate response.

Zomato would be the first mega IPO from the Indian startup ecosystem this year. According to media reports, the company is eyeing raising up to $1 billion at a valuation of $6-8 billion. 

Importantly, the company had said that only primary capital would be raised through the public listing. However, Entrackr’s sources emphasised that one investor would also offer Zomato’s shares in the offering.

Since last year, the company has mopped up close to $910 million from Tiger Global, Kora, Fidelity and several others across several tranches of its Series J round.