By Aditya Raghunath
Investing.com -- Food delivery and service platform Zomato Ltd (NS: ZOMT ) made a stellar debut on the stock markets on Friday, closing at Rs 125.85, 66% over its issue price. However, ace investor Rakesh Jhunjhunwala is not impressed with the stock.
At a webinar by Equirus, Jhunjhunwala said that he won’t buy the company’s shares. “What I buy is very important, at what price I buy is the most important. Let Zomato be worth Rs 99,000 crore and Tesla be $600 billion or $6 trillion. I am not going to buy these stocks,” he said.
He said that tech companies and their fans often think that changes in the world are going to come at a much faster pace than anticipated. However, that is not the case. “Changes do come, but at a much slower pace than anticipated,” he said.
He explained that before the high valuations, companies should ensure cash flow is there. “I am interested in a cash flow model, valuations will have to follow. Business valuations should not be more important than business model and sustainability,” he said.
“Today you value Zomato at Rs 1 lakh crore. But when is Zomato going to get Rs 3,000 crore of cash. In the stock market, it's important how long it takes, it's more important how long it lasts,” he said.
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