Reliance shopping spree

Netmed: Bought 60% stake for 83 million dollar in 2020.

Urban ladder: 96% stake for 25 million dollar in 2020.

Zivame: A controlling stake from Roonie screwala. Reliance could pay 160 million dollar for 100% stake. Currently it owns 15%.

SkyTran: 55% stake for building pod taxi prototyping.

Haptic : (An AI system) 87% stake for 100 million dollars in 2019.

Embibe: Education technology bought in 2018.

Saavan: (Online music)104 million dollar in 2018.

Grab: (Logistic start up) for 14.9 million dollar.

Asteria aerospace: New age technology.

Nowfloats: (Platform that allows individuals and businesses to easily build an online presence) for 20 million dollar.

Radisys:(Technology for telecommunication) for 74 million dollar in 2018.

Just dial: Now in 2020.

Zomato IPO: Valuation of loss making company

It's very hard to do a valuation of the loss-making company. As the company is a loss-making we don't have any earning. When we don't see any earnings it's difficult to understand the PE ratio. If we don't have the PE ratio how will we know it is undervalued or overvalued.

In this scenario, we use enterprise value (EV) and sales revenue ratios. 

Zomato EV/sales = 25 (according to economic times)

The share price of Zomato is 76 rupees. Now the company's total sales revenue is 3 rupees,(75/25) as mentioned in the EV/sales formula. 

If the company turns profitable and has a 10% margin, it's earning per share is 0.3 rupees. 

So PE of profitable Zomato will be 75/0.3=250

It's highly overvalued.

If Zomato continues to grow with 100% every year, which it has grown from last two years, Then it will take another 5 years to earn 10 rupees per share.

So after becoming profitable Zomato has to double every year for 5 years to give me a PE of 7.6. If it happens then It is good to buy at the current price.

It will become the next Asian paint of India, as it is sitting on a pool of data collected until now. Zomato knows at which area, at what time, what people like. Its data knows the taste of every corner of India. These data will help them to create beautiful business verticals. I don't see it as a delivery company, I see it as a tech company.