To hold or to harvest? info edge’s exit decision at the zomato IPO

Research methodology This case was prepared entirely from secondary, publicly available sources, and involved no interviews, no primary data collection and no participation by the company. The principal sources are Zomato Limited’s red herring prospectus (2021), filed with the Securities and Exchange Board of India; Info Edge (India) Limited’s annual reports and quarterly results for the financial years 2011–2025; the two firms’ regulatory filings and investor communications; and contemporaneous reporting in the business press. No information has been disguised, and because all material is in the public domain, no protagonist consent was required. The financial figures were reconciled across these sources, and one reconciliation is worth flagging for instructors. Info Edge’s certified average cost of acquisition of about ₹1.16 per share, implying roughly ₹144 crore, is the residual cost of the shares it still held at the IPO; it is not the cash the firm deployed. The gross cash deployed across the funding rounds was substantially larger, on the order of ₹484 crore, much of it in preference shares later converted to equity, because the 6,699-for-1 bonus issue diluted the per-share cost and the April 2018 sale of about 8.61% of Zomato to Alipay removed the cost of the shares sold. The return analysis in the companion workbook is built on this reconciliation; because the per-round timing of the cheques is not disclosed in the filings, the internal rate of return is illustrative, while the money multiple and the gross, net and retained-cost figures are anchored to primary sources. Case overview/synopsis The case examines the exit decision of a corporate venture investor at the moment its most successful bet finally becomes liquid. Info Edge (India) Ltd seeded Zomato in 2010 and, over a decade, deployed roughly ₹484 crore (₹1 crore = ₹10 million) to build a stake worth nearly ₹9,455 crore at the company’s July 2021 IPO. Importantly, it had already recovered about ₹328 crore by selling part of the stake to Alipay in 2018, so by the IPO it had recouped most of its outlay. On the eve of the offer it nonetheless halved its planned share sale and realised only a further ₹375 crore, holding the remainder through a regulatory lock-in in a still loss-making business at a euphoric valuation. Students are asked to evaluate that harvest-versus-hold choice on its merits, weighing realised against unrealised returns, the signalling effect of an early backer selling, the firm’s unusual permanent-capital structure, and the concentration risk that holding would create. Complexity academic level The case is intended for postgraduate and executive MBA electives in Venture Capital and Private Equity, Entrepreneurial Finance, and Corporate Finance and Valuation, and for advanced undergraduate finance. It also supports a session on corporate venture capital or on capital-market liquidity events. It suits in-seat, hybrid and online delivery.