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    9984   JP3436100006

SOFTBANK GROUP CORP.

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Ant-backed Zomato's stellar debut sets pace for other Indian tech listings

07/23/2021 | 07:48am EDT
Illustration picture of Indian food delivery company Zomato

BENGALURU (Reuters) - Indian food delivery firm Zomato Ltd surged 65.8% in its stock market debut on Friday, giving the startup a valuation of 988.49 billion rupees ($13.28 billion) and setting the stage for other domestic startups that are waiting in the wings with listing plans of their own.

The 13-year-old company belongs to the first generation of big home grown startups in the country to go public successfully on Indian bourses.

"Zomato is definitely a big event for the startup community, and for the other technology companies that are waiting to come to the capital market," said Siddhartha Khemka, head of retail research, broking & distribution at Motilal Oswal Financial Services.

Berkshire Hathaway Inc-backed Paytm, hospitality company Oyo Hotels and ride-hailing firm Ola, both backed by SoftBank, are among other Indian startups set to enter markets.

Like U.S.-based DoorDash Inc, Zomato is mainly a food delivery app, having partnered with about 390,000 restaurants and cafes in 525 Indian cities. It also allows customers to book tables for dining-in, write food reviews and upload photos.

Zomato's opening price of 116 rupees, a 53% premium to the offer price of 76 rupees, was the second best performer among Indian listings of at least $500 million, after Power Grid Corp, which gained 73% at open on its first trading day in 2007.

Like most other startups, the Gurugram-based company is yet to make a profit. It has said it will use the money raised from its listing to better its delivery infrastructure and acquire more users. The company competes with SoftBank-backed Swiggy and Amazon.com's food delivery service.

LONG TERM GOALS

Thirty-eight year old founder Deepinder Goyal, an engineer from the esteemed Indian Institute of Technology in Delhi, said the "tremendous response to our IPO gives us the confidence that the world is full of investors who appreciate the magnitude of investments we are making, and take a long term view of our business."

Analysts agreed, hailing the success of the IPO as a testament to changing appetite by investors and an ability to support risk-taking.

"The market is showing some maturity by trying to understand and value such companies which are non-traditional, both in terms of the business that they do and in terms of the financials they offer," Motilal Oswal's Khemka said.

China's Ant Group holds a 16.53% stake in Zomato, while its top shareholder with an 18.55% stake is online technology company Info Edge (India).

Zomato's listing comes after other internet-based delivery startups such as DoorDash and Deliveroo. While DoorDash had a successful debut late last year, Deliveroo flopped in March.

"Zomato doesn't come with the baggage that dragged at the UK firm's debut," said Danni Hewson, a financial analyst with British investment platform AJ Bell.

"Growth is key here. Zomato might not be profitable but it is growing exponentially and is enviably positioned to keep that momentum."

($1 = 74.4250 Indian rupees)

(Reporting by Chandini Monnappa and Anuron Kumar Mitra in Bengaluru; additional reporting by Gaurav Dogra; Editing by Arun Koyyur, Kim Coghill and Louise Heavens)

By Anuron Kumar Mitra and Chandini Monnappa


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DELIVEROO PLC 2.46% 321 Delayed Quote.0.00%
INFO EDGE (INDIA) LIMITED 0.58% 6836.95 Delayed Quote.42.87%
POWER GRID CORPORATION OF INDIA LIMITED 0.85% 178.15 End-of-day quote.25.15%
SOFTBANK GROUP CORP. 1.90% 6449 End-of-day quote.-19.97%
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Analyst Recommendations on SOFTBANK GROUP CORP.
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Financials
Sales 2022 6 040 B 54 779 M 54 779 M
Net income 2022 1 310 B 11 879 M 11 879 M
Net Debt 2022 14 983 B 136 B 136 B
P/E ratio 2022 8,86x
Yield 2022 0,68%
Capitalization 11 048 B 100 B 100 B
EV / Sales 2022 4,31x
EV / Sales 2023 4,08x
Nbr of Employees 58 786
Free-Float 69,3%
Chart SOFTBANK GROUP CORP.
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SoftBank Group Corp. Technical Analysis Chart | 9984 | JP3436100006 | MarketScreener
Technical analysis trends SOFTBANK GROUP CORP.
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 15
Last Close Price 6 449,00 JPY
Average target price 10 345,20 JPY
Spread / Average Target 60,4%
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Managers and Directors
Masayoshi Son Chairman & Executive President
Yoshimitsu Goto CFO, Director & Senior Managing Executive Officer
Raul Marcelo Claure Chief Operating Officer & Executive Vice President
Tim Mackey Chief Legal Officer & Group Compliance Officer
Masami Iijima Independent Outside Director
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