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The plot is quite intriguing. You run a business that is revolutionizing the way people eat, one delivery at a time. It has been in a fierce battle with an archrival in a highly competitive market. Furthermore, it is a loss-making business.

The founders' ambitions, on the other hand, are not easily subdued. They turned to the public for funding in order to forward their mission. The prospectus was met with skepticism by many. Despite this, many people believed in the company. With a massive reaction to the IPO, they demonstrated their faith. And now, the market valuation of India's first unicorn is greater than that of one of the country's largest IT firms, Tech Mahindra. Yes, we're referring to none other than our favorite Zomato.

Zomato soars to new heights:

On Monday, the recently listed company's stock climbed 12 percent. This increase comes on top of the 66 percent increase saw on Friday. The cumulative gain since the IPO is now in the 85 percent area.

With this increase, the company's market capitalization has risen to Rs 1,10,499 crore, surpassing the Rs 1,08,340 crore market capitalization of Tech Mahindra, the fifth-largest IT firm. At the same time, Zomato is getting closer to Bajaj Auto's market capitalization of Rs 1,11,262 crore.

On the BSE, the stock soared 14.22% to a high of Rs 143.75. At the conclusion of the day, the stock was trading at Rs 140.85, up 12%.

Bids for Rs 2.13 lakh crore worth of shares were received for Zomato's Rs 9,375 crore IPO. This was the third-highest number in the history of the Indian Capital.

Responses to critics:

Despite public skepticism of Zomato's high valuations, analysts claim that conventional knowledge does not apply to online companies.

Current market events were explained in some detail by ICICI Securities.

“Historically, customer adoption in most new product categories took a long time of 15-25 years before it gained critical mass and companies became profitable in their respective businesses. In contrast, we find category adoption of some of the segments such as food-tech, payments, and e-commerce to be very encouraging despite their limited history of existence. For instance, we estimate healthy 16 percent food-tech adoption outside the urban core (Next-500 towns) despite hardly 2 years of presence of Zomato/Swiggy” ICICI Securities stated.

(Source: Trak)