Zomato valuation

1. Zomato – My Valuation (04 Jul 2021)
IPO of Zomato would soon open. Every investor would have different expectations of how Zomato would do in future
and would bid accordingly in IPO.
I have done basic valuation of Zomato with assumptions:
 Although Zomato operates in multiple countries, it main source of income would be India, inline with its
current business.
 Food delivery within India to form major business operations and then membership of Zomato Pro/Gold.
Other businesses like HyperPure, Nightlife and Nutrition are nascent at this stage and will not affect valuation
much.
 The profit/loss generated from proposed Investment in Grofers (if done) would be smaller than overall
valuation of Zomato.
 Zomato can earn large source of income by providing analytics and software solution to restaurant industry.
However, due to lack of sufficient business plan availability, it is not considered.
 Zomato no. of orders is considered at 259 crores per annum (6.5x of Jun 2020) and Zomato Gold/Pro
membership at 1.1 crore (10.8 x of 2019)
Most Likely
Annual Orders (In Crores) 259
Total Revenue (Per Order) 75
Per Order (Cost to Service) 38
Total Profit (Order Delivery) (in Crores) 9,523
Zomato Gold/Pro (Members in Crores) 1.1
Membership Fees 1,500
Total Income (Zomato Gold/Pro) (In Crores) 1,617
Total Income (In crores) 11,141
Other Expenses (HO staff, Sales, Promotions, IT, etc.) (in crores) 2,785
PAT (in crores) 6,267
PE multiple (at maturity) 17.5
Market cap (at maturity) (in crores) 1,09,666
Years Taken to Reach Maturity 5
Discount Factor (Adjusted to risk involved) 15
PV of Cash Burn (in crores) 5,000
PV of Market Cap (in crores) 49,523
PV of Market Cap (in billion $) 6.6
Value of Zomato (last funding round) (in billion $) 5.4
As per my estimates of its business, Zomato valuation comes out to be $6.6 billion USD. Zomato was valued at $5.4
billion in last funding round.
Excel file can be downloaded at
https://drive.google.com/file/d/1ruZ2qWpY67WKaHj0TTcIcM6gZTJQ22xR/view?usp=sharing
Author is not liable for any data presented, assumptions, or omissions made here. The valuation model is absolute
free to use/modify/publish by anyone without any consent. Author is grateful to sources referred and has mentioned
in excel sheet.