Swiggy has challenged the operating metric used by Zepto in its IPO filing, arguing that Net Realisable Value (NRV) may inflate reported revenue by about 20%. The dispute highlights the difficulty investors face when comparing growth and scale among competing quick commerce platforms with different reporting standards.
A debate is unfolding in the Indian quick commerce sector as Swiggy disputes the headline operating metric used by rival Zepto in its Draft Red Herring Prospectus (DRHP). At the heart of the disagreement is how companies define their business size, a crucial factor for investors weighing the growth potential of platforms like Swiggy’s Instamart, Zepto, and Blinkit.
Metric Differences and Investor Impact
Swiggy has raised concerns over Zepto’s choice of Net Realisable Value (NRV) as a primary indicator of its business scale. While traditional industry practice has favored Net Order Value (NOV)—which counts the actual money consumers spend on delivered orders—Zepto’s NRV metric is broader. It combines direct consumer spending with other income streams, such as advertising revenue, subscription fees, and brand-funded discounts.
In a recent shareholder letter, Swiggy argued that incorporating these non-consumer-spend items into transaction value creates a less transparent view of demand. The company estimated that using NRV can inflate a company’s reported top-line by approximately 20% compared to a standard NOV measure. For context, Zepto reported an NRV of ₹24,816 crore for FY26. Based on Swiggy’s internal estimates, the equivalent NOV figure would be roughly ₹20,000 crore, significantly lower than the headline number presented in the filing.
Accounting Standards and Transparency
This debate follows earlier questions regarding Zepto’s financial reporting. For instance, some market observers have noted that Zepto does not capitalize certain employee costs, a practice that differs from typical industry accounting norms. Such variations in reporting can complicate direct financial comparisons between competitors, often leaving investors to reconcile different methods when evaluating profitability and growth trajectories.
Swiggy maintains that while revenue from advertising and brand partnerships is vital for reaching profitability, it should be kept separate from direct consumer spending metrics. By mixing these categories, the company suggests that the true underlying growth of consumer demand becomes difficult to isolate.
Next Steps for Investors
As Zepto moves forward with its IPO process, the focus for investors will be on how the company defends its chosen metric and whether it provides clearer reconciliations between NRV and standard NOV reporting. Market participants will also be looking for standardized disclosures that allow for a direct "apples-to-apples" comparison between quick commerce players. Investors may continue to monitor how regulatory bodies view these reporting choices and whether future filings provide greater clarity on the core business performance versus auxiliary revenue streams.