UK-based JustEat Group, which provides online food ordering services in multiple geographies including in India, has floated its initial public offer (IPO) in London. The firm said it is eyeing a market cap of £1.47 billion ($2.44 billion) on listing.
The group said it would receive £100 million out of gross proceeds of £360.1 million from the offer. Which means bulk of the issue comprises offer for sale by its existing investors, including SM Trust, Index Ventures, Vitruvian Partners, Redpoint Ventures and Greylock Partners.
The firm had global net revenue of £96.8 million with EBITDA of £14.1 million, representing growth of 61.9 per cent and 518 per cent, respectively, compared with 2012. The firm is eyeing a valuation multiple of over 15x its net revenues and 100x EBITDA.
What does the IPO mean for the Indian subsidiary?
Launched in 2001, JustEat Group allows users to order food in real-time from local takeaway restaurants via a portal. The firm is headquartered in London and is active in 13 countries across the globe.
The group forayed into India in January 2011, with the acquisition of a 33 per cent shareholding in Achindra Online which operated HungryZone which was later renamed as JustEat.in. Its stake rose to 67 per cent and later to 91 per cent when the firm infused more capital through multiple rounds. However, in November 2013 the group relinquished control of JustEat.in, following the investments from Axon Partners Group and Forum Synergies India.
The group's shareholding has now reduced to 59 per cent and its voting rights and economic interests decreased to 49.9 per cent, which means it ceases to be a subsidiary of JustEat UK.
It disclosed the carrying value of its remaining investment in the Indian operations is £448,000 (Rs 4.5 crore).
"Technically speaking, nothing has changed with this IPO," said Ritesh Dwivedy, CEO, JustEat.in. "The parent company still holds a majority stake in our business, although its shareholding had come down from what it used to be with the capital injection from Axon Partners and PE firm Forum Synergies in November last year. Naturally, its board representation has come down and the group now holds voting rights of just under 50 per cent."
Dwivedy claims that the Indian subsidiary is on an annual run rate to do 5 lakh or 0.5 million orders, with average ticket size in the range of Rs 400-450 and average commission in the range of 11-12 per cent. This would translate into an annual commission or net revenue of around Rs 2-2.5 crore.
The Indian unit, JustEat.in, is currently present in 10 cities, including Bangalore, Delhi-NCR, Mumbai, Chennai, Hyderabad, Gurgaon, Noida, Pune, Ghaziabad and Faridabad, and has partnered with more than 2,500 restaurants across these cities. In an interview with Techcircle.in last month, Dwivedy had said that firm was looking to break even by 2016.
(Edited by Joby Puthuparampil Johnson)