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Zomato IPo and questions of around it

India’s largest food delivery company Zomato IPO has opened today. Its price band has been kept between ₹ 72 to ₹ 76. The Zomato company has set a target of raising Rs 9375 crore from the market through this IPO. With the IPO of Zomato, a new debate has erupted in the stock market. It is about the sustainability and business model of these unicorn companies.

All the forms about Zomato are saying that, you can buy shares of this company for price gain in IPO. But here the question arises that when everyone is investing money in IPO for price gain, then who will buy the shares after this IPO at high low prices?

Question on business model of startup companies in India

Most startup companies do not have any employees of their own. This is the biggest problem with the e-commerce market. If you look at startup companies in India, it is all loss making. Be it Flipkart, Zomato or Paytm. If we talk about Zomato company, then it is not yet profitable. At present, the Zomato company is in a loss of two thousand crores.

In such a situation, the question is arising that if these startup companies are in loss, then who will buy the shares of these companies.

If you look at the stock market history of India, companies prefer to be registered in the stock market only when it is profitable. Their business model should be more sustainable. But this is not the case with these unicorn companies. If this IPO of Zomato is successful, then its market valuation will be Rs 64000 crores.

future of startup companies

If you look carefully, all the startup companies that are there, they are almost all companies based on data. If the data is snatched from these companies, then their business model may fail. Experts are also showing the fear of this. In such a situation, the question arises that how sustainable is the business model of these companies?

If you look at countries like Europe America, data protection laws are being tightened there. Europe has already introduced legislation for data protection. Now that users from Europe are aggregated, it is necessary to first get the permission of the user.

Similar data protection law is also being brought in India. According to this data protection law, a complete bridge of data is being built. Any company can use this data. In such a situation, it may become even more difficult for these startup companies to survive in the future.

Who will buy the shares of startup companies

While we know that startup companies are making loss in India. Then the question arises that who will buy the shares of these companies? Zomato company itself is running in loss of 2000 crores. Apart from this, other startup companies are also facing huge losses. In such a situation, the question arises that who will buy the shares of these companies?

In India, a large number of new users have entered the stock market for some time now. In such a situation, it is expected that these new users are going to invest money in Zomato and other startup companies.

Old people who are present in the stock market. He prefers to invest less money in a startup company. Although it is necessary that even the old people of the stock market are investing a little money in the startup company according to the future. But the majority will buy new uses. This is being speculated.

It is being said that the future of startup companies in India is bright and their reach in rural areas is going to increase in the coming time. According to this, old people can also invest money in the startup company. However, the size of this money is being estimated to be very less.

Another startup company may bring IPO now

If Zomato’s IPO is successful, then other startup companies in India can also come with IPO. Apart from this, Paytm has also announced to bring IPO in the Indian stock market.

At the same time, the news is coming that payment app MobiKwik has also decided to bring IPO in India’s stock market. Apart from this, Swiggy, Big Basket and other startup companies can bring IPO. However, bringing IPO by all these companies will depend on how successful the IPO of Zomato and Paytm is?

Vikas Yadav
Vikas Yadavhttps://thesocialchat.in
Hii my name is Vikas Yadav and I am a content writer and content editor in the social chat. I have 5 year experience in content writing and editing. You can follow us for more trending stories from around the world.


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