Connect with us

Business

Big Bull Stock Markets Jhunjhunwala Questions Zomato Hype

Published

on

 


Rakesh Jhunjhunwala said Zomato needs to demonstrate frugality, corporate governance and technology in order to justify its high valuation and market capitalization.

Zomato climbed over 60% on its listing day on Friday to settle at INR 125.85, commanding a market cap of INR 1 lakh Cr at one point. On Monday it opened at a high of 132 INR.

Experts pointed out that the Zomatos platform benefits from a lot, but it lacks both intensity and proprietary data

The big bull of the Indian stock markets, Rakesh Jhunjhunwala, believes that the hype around Zomatos’ listing and its high market capitalization is not yet ready to be supported by cash-generating business models.

Speaking During a webinar hosted by Equirus Capital, Jhunjhunwala wished Zomato good luck but said he would not buy his shares, adding that going to every party in town would leave people hungover. “The hangover doesn’t come until the next day!” “

“What I buy is very important, at what price I buy is the most important. Let Zomato be worth INR 99,000 Cr and Tesla $ 6 billion. I’m not going to buy these shares, ”Jhunjhunwala said.

He added that a business needs opportunity, frugality, corporate governance, technology and the capacity for change, even though he likes the attitude of young entrepreneurs.

Jhunjhunwala insisted that startup valuations are over-anticipated, especially with tech companies. He added that people should only focus on business models that make money rather than taking foreign money and burning billions of dollars.

“The changes are coming, but at a much slower pace than expected,” he said, comparing internet-based and new-age tech startups with HUL, Asian Paints, Pidilite among many who have taken decades to give investors sustained sustained returns. by strong role models.

Zomato climbed over 60% on its listing day on Friday to settle at INR 125.85, commanding a market cap of INR 1 lakh Cr at one point. On Monday it opened at a high of 132 INR.

Zomato’s challenges

Overall, Zomato’s INR 9,375 IPO received 2,751.27 Cr offers for a total issue size of 71.92 Cr shares, according to National Stock Exchange (NSE) data.

The Qualified Institutional Buyer (QIB) portion of Zomato’s IPO was the most oversubscribed at 51.79 times the size of the offering. Foreign institutional investors (FIIs) dominated the QIB portion, followed by banks, financial institutions and mutual fund companies.

Valuation expert and professor of corporate finance at the Stern School of Business at New York University, Ashwath Damodaran noted in his Blog that, according to financial data shared by Zomato in its draft red herring prospectus (DRHP), the company’s shares should be rated at INR 41, almost half of the actual issue price.

Damodaran listed a number of premises leading up to INR 41 assessment. He assumed that the food delivery market in India would reach up to $ 40 billion and Zomatos’ market share would reach 40 billion. % over the next five years and an operating margin of 30 per cent for its calculation. This includes the fact that the Indian market is diversifying very quickly and there is a possibility that Zomato will end up with a maximum 20% share of the food delivery market of $ 10- $ 40 billion. Additionally, if rival companies, including Swiggy and Amazon’s food delivery initiative, make aggressive bets, market dynamics can change significantly.

Experts have pointed out that the Zomatos platform benefits a lot, but it lacks both intensity and proprietary data. So Zomato app users are only on the system when ordering food, and engagement is often limited to ordering and delivering food.

On a similar note, Jhunjhunwala said that Zomato handed out massive discounts to gain a large user base. But to justify the valuation, it must demonstrate income of INR Cr 4,000 and above, as companies with a similar valuation have done.

Sources

1/ https://Google.com/

2/ https://inc42.com/buzz/big-bull-of-stock-markets-jhunjhunwala-questions-the-zomato-hype/

The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

ExBUlletin

to request, modification Contact us at Here or [email protected]