On July 14, Zomato Ltd. will begin a three-day initial public offering, the first by a food technology business in India.
But before you put money in zomato ipo, you should be aware of the following risks:
1. Zomato has a history of operating losses, which company expects to increase in the future.
2. The possibility of a third wave of Covid-19 poses a threat to the virus's recovery.
3. The increased expansion of business resulting from the Covid-19 pandemic may not continue in the future, and Zomato may not be able to maintain its growth rate.
4. If a regulatory or judicial body finds that any of the company's business activities are or have been performed in infringement of the policies, regulatory actions, including monetary fines, may be enforced.
5. For the firm to continue to attract and retain customers, as well as restaurant partners in the network, brand equity must be sustained. Any failure on that front could have a negative effect on the company's growth.
6. Though the internet food service market is currently a duopoly, it has the potential to attract huge players with deep finances as the industry matures.
7. It may not be allowed to engage in certain commercially appealing business operations or investments without prior approval from the government.
8. Big giant player like Amazon already started its food delivery services in Banglore, which probably disturb or divert customer base from Zomato.
Also Read: Systematic Anlaysis of Zomato IPO Review: Zomato IPO Review
