Zepto Revives IPO Plans, Set to File Draft Papers with SEBI in Weeks

Quick commerce leader Zepto has reportedly resumed its preparations for an Initial Public Offering (IPO) and is expected to submit its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) within the next two to three weeks. The filing is anticipated to be made through the confidential route, a process allowing companies to keep their IPO details private initially. The proposed public issue is set to comprise a fresh issuance of shares worth between $450 million and $500 million (approximately INR 4,000 Cr to INR 4,500 Cr), along with an offer for sale (OFS) by its early investors. However, these figures are preliminary and subject to change based on Zepto's financial performance, particularly its cash burn rate. The company is aiming for a stock market listing between July and September of next year.

Earlier, Zepto had postponed its IPO plans, originally slated for 2025 or early 2026, to concentrate on achieving growth, profitability, and increasing domestic ownership. As part of its strategic shift and IPO preparations, Zepto relocated its domicile from Singapore to India earlier this year and rebranded its registered entity to Zepto Pvt Ltd from Kiranakart Technologies Pvt Ltd in April.

This move follows a significant funding round last month where Zepto secured $450 million (around INR 3,955 Cr) at a valuation of $7 billion. This funding, a mix of primary and secondary capital, strengthens its position against competitors like Blinkit and Swiggy Instamart in the fast-growing quick commerce segment. Zepto has also been actively trying to boost its market share by waiving handling and surge fees for customers.

Financially, Zepto reported substantial revenue growth, with its revenue climbing 149% to INR 11,100 Cr in FY25, up from INR 4,454 Cr in the previous fiscal year. Despite this growth, the company posted a loss of INR 1,248.64 Cr in FY24. To improve its financial standing ahead of the IPO, Zepto has been implementing cost-cutting measures, including nearly 500 employee layoffs since April this year as part of a restructuring exercise.

Impact This news signifies a major step for Zepto towards becoming a publicly listed company, potentially boosting investor confidence in the quick commerce sector and other tech startups. A successful IPO could lead to significant capital infusion, enabling further expansion and competition. It might also influence investor sentiment and market valuations for similar companies. The listing could also increase domestic ownership and bring more liquidity to the sector. Rating: 7

Heading Difficult Terms: DRHP (Draft Red Herring Prospectus): A preliminary registration document filed with the securities regulator by a company intending to make an Initial Public Offering (IPO). Confidential Route: A regulatory process that allows companies to file their IPO registration documents confidentially with the regulator before making them public. Offer for Sale (OFS): A method of selling securities by existing shareholders, rather than the company issuing new shares. Domicile: The country where a company is legally registered and based. Valuation: The estimated economic worth of a company. Primary Capital: Funds raised by a company through the issuance of new shares. Secondary Capital: Funds raised by selling existing shares or assets, typically by existing shareholders. Cash Burn: The rate at which a company spends its cash reserves to finance its operations before becoming profitable. Top Line: Refers to a company's gross revenue or sales, usually reported at the top of its income statement. Bottom Line: Refers to a company's net profit or loss, usually reported at the bottom of its income statement.