Zomato IPO reveals a Change of Guard in the Indian Capital Markets: Young and First Time Investors Driving Demand

by Suman Gupta

• Zomato IPO has revealed a likely shift happening in the key Investor cohorts that drive the Indian Capital Markets

• More than 22% of Day-1 applicants for Zomato IPO on Paytm Money were new to industry investors

• 27% of Day-1 Zomato IPO Applicants on Paytm Money were under the age of 25, and 60% were under 30; Historically 55% of IPO applicants on the platform have been under the age of 30. The avg. Zomato IPO investor was a year younger than applicants for previous IPOs on Paytm Money

• Avg. Investment in Zomato IPO on Day-1 was 20% higher than avg. investment in previous IPOs on Paytm Money

• Other than top cities like Delhi, Bengaluru, and Mumbai, first time participation seen from smaller towns like Kodinar in Gujarat, Tuensang in Nagaland, and Rangapara in Assam

• Women contributed 10% of overall applications on Day-1 with a marginally higher ticket size vs. male counterparts

Paytm Money, a leading digital brokerage platform offering the Zomato IPO from July 14th to 16th, has uncovered some interesting demographic insights on Indian Capital Markets, based on a study of investors who successfully completed the Zomato IPO application on its platform on day 1.

Zomato IPO received a strong response from the investing community, with the retail position subscribed by over 200% within the first couple of hours of opening. A Paytm Money spokesperson suggested that a large proportion of the Zomato IPO applicants could be young or new to capital markets investors.

More than 22% of Day-1 applicants for Zomato IPO on Paytm Money were new to industry investors. 27% of Day-1 Zomato IPO Applicants on Paytm Money were under the age of 25 and 60% were under the age of 30; Historcially 55% of IPO applicants on the platform have been under the age of 30.  On avg., a Zomato IPO applicant was a year younger than IPO applicants for previous IPOs on Paytm Money.

The average ticket size of IPO applications for Zomato on Day-1 was 20% higher than the avg. ticket size for other IPOs on Paytm Money. This could be explained by the overall popularity of the Zomato IPO, or could also indicate a marginal surge in risk appetite of retail investors.

More interestingly, the data also indicates a more diverse pool of IPO applicants. Other than top cities like Delhi, Bengaluru, and Mumbai, Paytm Money saw first time participation from smaller towns like Kodinar in Gujarat, Tuensang in Nagaland, and Rangapara in Assam. Women contributed 10% of overall applications on Day-1 with a marginally higher ticket size vs. male counterparts.

Zomato was the first IPO on Paytm Money to go live with the “Pre-open IPO Application” feature, which allows users to place an IPO order 24×7, a couple of days before the IPO goes live. In a bid to offer the most comprehensive IPO application experience to its users, Paytm Money has also launched a set of other advanced features recently, including  one-click IPO applications, IPO application via shareholder category, and tracking of live IPO subscription numbers.