In a rare move, state-owned Life Insurance Corp. of India (LIC) is weighing a bid for Zomato’s shares in the online food delivery platform’s initial public offering this week, two people directly aware of the matter said.
LIC, which typically invests in secondary markets unless the public issue is a part of the government’s divestment programme, is expected to bid shares in the upcoming IPO of Zomato, the people said, requesting anonymity.
“Zomato’s growth curve demonstrates how rapid India’s transition to the economy has been,” said one of the two people.
Zomato’s valuation has surged from around $5.4 billion in January to over $8 billion in June as the pandemic has boosted the popularity of online platforms as people avoid going out for fear of contracting infections.
India’s largest online food ordering platform is looking to raise as much as Rs 9,375 crore in the public issue. It will be the first of a bunch of Indian consumer internet unicorns that will go public in the next few months Zomato’s shares are priced between Rs 72 and 76 apiece and will open for subscription on 14 July.
“LIC’s investment committee will hold a meeting soon to take a final decision on the plan to invest in Zomato’s IPO,” said the second person. An e-mail sent to the spokesperson for LIC did not elicit any response.
In the quarter ended 31 March, LIC’s holding in publicly traded companies dropped to an all-time low of 3.66% of the market value of 296 companies (where its holding is more than 1%). It was 3.7% as of 31 December.