Quick commerce firm Zepto is reportedly planning to reduce its IPO target to $650-$700 million. The move follows pressure from institutional investors for a more realistic valuation, now expected at $3.5-$4 billion, down from its previous $7 billion private round.
Quick commerce company Zepto is reportedly recalibrating its initial public offering (IPO) plans by reducing the proposed issue size by approximately 20%. The firm is now targeting a fresh capital raise of $650 million to $700 million, a downward adjustment from the initially planned $850 million. This shift reflects a cautious approach to market demand following pushback from investors regarding the company’s valuation.
Valuation and Market Expectations
The proposed valuation for the upcoming public issue is now anticipated to fall between $3.5 billion and $4 billion. This marks a notable change from the $7 billion valuation the company achieved during its private funding round in October 2025, which was led by the US pension fund Calpers. Under current Securities and Exchange Board of India (Sebi) guidelines, any change in issue size exceeding 20% would require the company to refile its draft prospectus, a process the management is likely balancing against current market sentiment.
Pressure from Domestic Institutions
Domestic mutual funds have reportedly played a significant role in advocating for more conservative pricing. With Sebi regulations requiring that 40% of the anchor book be allocated to domestic institutional investors, their appetite for a more rationalized valuation has become a critical factor for the company. While Zepto maintains a strong position in order volumes within the quick commerce sector, investors are increasingly focusing on the company’s path toward profitability given its aggressive expansion strategy.
Competitive and Financial Context
The quick commerce sector remains highly competitive, with established players like Blinkit, Swiggy Instamart, BigBasket, and large retail chains like Reliance Retail’s JioMart and Amazon competing for market share. Zepto’s financial performance is a primary focus for market observers; the company reported an adjusted EBITDA loss of approximately Rs 5,000 crore for FY26. For comparison, Blinkit reported an adjusted EBITDA loss of Rs 277 crore, while Swiggy Instamart reported a loss of Rs 3,500 crore in the same period.
As of March 31, Zepto’s draft prospectus indicated cash reserves of Rs 5,681 crore. The company’s move to tap the public markets despite current valuation headwinds highlights its ongoing need for capital to support operations and maintain its competitive position. Investors will likely look for updates on the final price band, which is expected to be announced in the coming days, and further clarity from management regarding its long-term strategy for narrowing operating losses in an industry where margins are under constant pressure from rapid growth requirements.