Zomato IPO will test Indian investors’ unicorn appetite: Analyst’s note

Zomato’s initial public offering will test Indian investors’ appetite for unicorns, as the food delivery aggregator operates in a competitive market, said a note by Anand Rathi Research.

Food consumption in India was about $670 billion in 2019–driven by home-cooked food. Food services, defined as non-home-cooked food or restaurant food, contribute around 10 per cent to the consumption market. This is lower than the United States and China where food services contribute about 54 per cent and about 58 per cent of total consumption.

“In FY20, Zomato generated marketplace gross order value of about $1.54 billion, around 2.3 per cent of the market and we believe that the company is in the early phases of broad market adoption,” said research analyst Shobit Singhal in the note.