SIG VC

CASE SOLUTION
PRIYANSHI BANSAL
22BA064
SRCC
 COMPANY OVERVIEW
Zomato is an Indian multinational restaurant aggregator and Paytm is a leading digital payment and financial services
food delivery company founded in 2008. The company company based in India in 2010. Its model is based on
provides information, menus, and user-reviews of providing a digital payment platform that allows users to
restaurants as well as food delivery options from partner make payments for a wide range of services, including
restaurants in select cities. Zomato's business model is mobile recharges, utility bill payments, movie tickets, and
based on generating revenue through advertising, online more. It also offers a range of financial services, savings
ordering and food delivery services. accounts, insurance, and loans.

Services Revenue Streams Services Revenue Streams

Restaurant information, Advertising Mobile recharges, utility Advertising
menus, and user-reviews Online ordering fees bills, and more. Merchant Services
Online ordering and food Delivery fees Savings accounts, E-Commerce Marketplace
delivery services Subscription Services insurance, and loans. Payments Bank
Table reservations Event Ticketing Paytm Mall, an online Wallet Services
Event listings and HyperPure B2B marketplace for a wide
promotions range of products.

Strengths: Strengths:
Strong brand recognition and reputation in the food delivery market in India. Leading mobile payments platform in India with over 350 million users.
Diversified revenue streams, including advertising and subscription services. Diversified revenue streams, including e-commerce and financial services.
Robust delivery network and logistics infrastructure. Strong partnerships with major Indian banks and financial institutions.
Weaknesses: Weaknesses:
Intense competition in the food delivery market in India. Intense competition in the mobile payments market in India.
Reliance on third-party restaurant partners for revenue. Regulatory challenges in the Indian financial services market.
Limited international presence compared to competitors like Uber Eats and Deliveroo. Limited international presence compared to competitors like PayPal and Alipay.
 INDUSTRY & COMPETITION
Zomato's key competitors in the food delivery space include Paytm's key competitors in the digital payments space include Google Pay,
Swiggy, Uber Eats, and Foodpanda. PhonePe, and Amazon Pay.
R RS Zomato has also expanded into other areas, such as online Paytm has also expanded into other areas, such as e-commerce and
JO O
A T ordering and table reservations, to diversify its revenue streams. insurance, to diversify its revenue streams.
M TI
PE
OM
C

Zomato's future lies in market expansion and service Paytm's future is anchored in fintech innovation,
RE diversification. The company may venture into new potential global expansion, and a commitment to
TU OK regions and explore additional revenue streams financial inclusion. The company is expected to focus
FU TLO beyond food delivery, potentially integrating on technology integration, security measures, and
strategic partnerships to strengthen its ecosystem,
OU sustainable practices. Continued investments in
technology and strategic moves to counter increasing while navigating regulatory landscapes for sustained
competition could shape its trajectory. growth.

Zomato has fostered a large and committed user Paytm, a trailblazer in India's digital payments and
community fascinated by its food delivery and fintech landscape, has cultivated an extensive and
SE restaurant discovery platform. Boasting millions of engaged user base. Catering to millions for secure
BA active users, it is a preferred destination for diverse digital transactions and mobile recharges, its QR code
ER culinary exploration. The platform's AI-driven technology simplifies payments, enhancing user
US personalized recommendations, coupled with an involvement. The platform's expansion into financial
intuitive interface, contribute to robust user services further deepens engagement, establishing it
engagement. Its dedication to enhancing the overall as a comprehensive financial ecosystem. With ongoing
user experience and broadening its service offerings innovations and a user-centric approach, it maintains
solidifies its position as a go-to platform for food a robust connection with its vast user community in
enthusiasts. the dynamic digital finance arena.
IPO ANALYSIS
INR 2142 2080 - 2150 INR 18300 Cr
Paytm IPO is a book built issue of Rs 18,300.00 crores. The issue is a
combination of fresh issue of Rs 8,300.00 crores and offer for sale of
Rs 10,000.00 crores.
Paytm IPO bidding started from November 8, 2021 and ended on
2021-11-08 2021-11-10 INR 1950 (9.3%)
November 10, 2021. The allotment for Paytm IPO was finalized on
Monday, November 15, 2021. The shares got listed on BSE, NSE on
November 18, 2021.

Paytm IPO price band is set at ₹2080 to ₹2150 per share. The 2021-11-18 INR 887
minimum lot size for an application is 6 Shares. The minimum amount (54.5%)
of investment required by retail investors is ₹12,900.

Zomato IPO is a book built issue of Rs 9,375.00 crores. The issue is a

combination of fresh issue of Rs 9,000.00 crores and offer for sale of
Rs 375.00 crores.
Zomato IPO bidding started from July 14, 2021 and ended on July 16,
2021. The allotment for Zomato IPO was finalized on Thursday, July
22, 2021. The shares got listed on BSE, NSE on July 23, 2021.

Zomato IPO price band is set at ₹72 to ₹76 per share. The minimum lot
size for an application is 195 Shares. The minimum amount of
investment required by retail investors is ₹14,820.
STOCK ANALYSIS
As market closed on 17.11.23

In the last year, Zomato has outperformed Paytm, surging 68 percent as

against a 39 percent rise in the latter. Both stocks have outperformed the
benchmark Nifty, which is up 6 percent in this period.
Similarly, in 2023 YTD as well, Zomato was the better performer. It rallied over
79 percent, giving positive returns in 8 of the 10 months so far this year.
Paytm also performed robustly this year, jumping 65 percent, giving positive
returns in 8 of the 10 months so far.
Both stocks have not followed the record-high trend of the Indian market this
year.
Zomato is still 27% away from its peak of ₹169, hit on November 16, 2021. but,
has jumped 202% from its record low of ₹40.60, hit on July 27, 2022.
Paytm is over 54% away from its record high of ₹1,955, hit on November 18,
2021, but, has advanced 102% from its record low of ₹438.35, hit on
November 23, 2022.
ICICI Securities predict a 34% upside for Zomato (target: ₹160) vs 18 percent
for Paytm (target ₹1,055).

ZOMATO PAYTM
FINANCIAL PERFORMANCE- ZOMATO
Net profit margins during the year
grew from 29.2% in FY22 to 13.7% in
FY23.
The trailing twelve-month earnings
per share (EPS) of the company
stands at Rs -1.2, an improvement
from the EPS of Rs -1.6 recorded last
year.

Zomato will be closing

FY23 with a positive
profit.
FY 23, Zomato saw 32.1 M
(114% YoY growth)
monthly active users and
a 48% market share.
FINANCIAL PERFORMANCE - Total Revenue has grown at CAGR of 69%.
PAYTM EBITDA before ESOP is Neg (176) Cr
Reached 8.2 Cr Avg Monthly Transacting Users and 68 Lakh Merchant Subscriptions.
Significant Material developments in HR
Successfully completed Buy-Back of shares of approx. 99.98% of the Max Buy-Back Size.
RECOMMENDATION
After conducting extensive research and analysis, we recommend that the
venture capital firm invest in Zomato.

Reasons for Recommendation

Zomato has a proven track record of success in the food delivery and
restaurant discovery markets, with a strong presence in India and several
other countries.
Our preference leans towards Zomato due to the relatively low
competitive pressure in the food delivery sector (dominated by Zomato
and Swiggy). In addition, Zomato's growing user base and the proliferation
of cloud kitchens in India further enhance its appeal.
Zomato's recent acquisition of Blinkit has facilitated its entry into the quick
grocery delivery market, an arena largely occupied by startups with no
dominant player.
Zomato's revenue growth has been consistently strong, with a 66%
increase in FY2023.
Zomato's management team has a strong vision for the future and a clear
plan for growth, including expanding into new markets and verticals.

While Paytm is also a promising startup with potential for growth, our analysis
suggests that Zomato is the better investment opportunity for the venture
capital firm.

THANK YOU !!