The Case of Zomato IPO: Success or Failure?

The case is about the food start-up Zomato, which floated its initial public offering (IPO) on 14 July 2021, with the aim of raising money from the general public. It aims to evaluate whether the company is overpriced or underpriced compared to its price band and offer price despite being a loss-making food start-up. The case also highlights how the two valuation techniques—discounted cash flow technique and relative valuation technique can be used to calculate the implied price or intrinsic value of Zomato. Also, which techniques will be better for calculating the intrinsic value and comparing it with the current market price to conclude whether the IPO was overpriced or underpriced? It analyses the advantages and disadvantages of each of these techniques for a firm like Zomato.