Decoding Zomato’s DRHP fine print; the numbers and its shareholding pattern


Zomato filed its draft red herring prospectus or DRHP earlier today and provided several details including its stakeholding pattern and its earnings during the first three-quarters of FY21. 

According to the draft, the company has recorded operating revenue of Rs 1,301.35 crore during the nine months ending December, and this reflects the pain of the pandemic as the company’s revenue took a hit. 

While the company’s business may have bounced back in the last three months of FY21, it is unlikely to cross last fiscal’s revenue of Rs 2,605 crore. 

Meanwhile, Zomato has improved its unit economics significantly by cutting losses during the first three-quarters of FY21. 

Revenue and expense breakdown

In the first three-quarters of FY21, the company earned 86% of its revenue from food delivery-related services and the sale of goods accounted for 9.56% of the operating income, while the remaining 4.34% was via the collection of platform fees from its restaurant partners.

Employee benefit expenses emerged as one of the largest cost centres amounting to Rs 549 crore. These expenses were equivalent to 40.15% of the company’s income and included share-based payments amounting to Rs 109.3 crore awarded to employees up until December 2020.

Zomato has 3,469 employees worldwide with around 48% working in sales and sales enablement and the average revenue per employee stood around Rs 39.42 lakh for the first three quarters.

The company spent Rs 307 crore on advertisement and promotions while the purchase of traded goods stood at Rs 127.1 crore in the first three quarters. It incurred Rs 363.3 crore in outsource support cost along with IT and server costs of Rs 107.3 crore from April to December. 

Another Rs 67.2 crores were spent on payment gateway services and legal fees taking the total expenditure to Rs 1,723.8 crore for the 9 months of operations. 

It lost around Rs 682.2 crore by December 2020 and its balance sheet shows outstanding losses of Rs Rs 5,468 crore. However, the company has managed to improve its EBITDA margin from -80.75% in FY20 to -41.83% by Q3 FY21. 

Besides the financial metrics, Zomato said that its monthly active user base stands at 29.6 million during the nine-month period. Its exclusive paid membership program – Zomato Pro – which unlocks flat percentage discounts for users, had 1.4 million members including over 25,350 restaurant partners.

On average, 10.7 million customers ordered food every month on Zomato in India with an average monthly frequency of over three times, said the draft. 

Zomato’s early backer Info Edge, which is offloading Rs 750 crore worth shares in the IPO, commands the largest stake ~ 18.55% followed by Uber that has 9.13%. Sequoia has 7.29% stake whereas Tiger Global sits on 6%, the DRHP mentioned.


Zomato’s co-founder and chief executive officer Deepinder Goyal owns 5.51% in the company he co-founded with Pankaj Chaddah in 2008. Chaddah appears to have mostly exited from Zomato. The DRHP doesn’t show him as a stakeholder, and even if he has shares, it’s less than 1%. The draft doesn’t feature stakeholders with less than 1%.

While Zomato had killed its grocery vertical ‘Zomato Market’ last year, the company may mirror China’s Meituan strategy and get into aggregating hotels, bars, pubs and marriage homes among others. 

The company recently started selling nutritional products and dietary supplements under the leadership of its former chief operating officer Gaurav Gupta.

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