Zepto Hits the Brakes on IPO, Eyes 2026 Launch!

Zepto postponed its initial public offering plans by a year. This puts the fast commerce giant in line with companies like Zetwerk, OYO, and PayU India, who similarly use a wait-and-watch tactic before parking on D-Street.

Zepto, notably, raised the size of the public offering from $450 million to $800 million to $1 billion. Zepto is reportedly trying to lower its capital burn and enhance its profit profile before going public, even though unfavourable markets are partially to blame.

Aadit Palicha, the CEO and cofounder of Zepto, has, however, made it clear that the company would submit its DRHP to SEBI later this year, suggesting a listing in 2026. Zepto has good reason to be concerned.

Despite operating sales of INR 4,454.52 Cr, up 2X YoY, the company recorded a loss of INR 1,248.64 Cr in FY24. The company has had to invest extensively in constructing additional warehouses, expanding into new areas, and providing discounts to attract and keep clients as a result of the escalating rapid commerce battles, which have eaten into this solid top line.

Not the Right Time to go Public

Given that Zepto has recently been involved in a number of issues, the timing also appears to be a little off. The company's reputation has also been damaged by a number of things, such as the cancellation of the food business licence for its Dharavi warehouse in Mumbai due to significant food safety violations.

Apart from that, the closure of 44 Zepto Cafe warehouses because of supply chain issues, an increase in complaints, a possible antitrust case, the use of dark patterns, and the auto-activation of ad campaigns for dormant brands without the seller's permission.

Like many others, Zepto is postponing its D-Street drive in light of the current situation.

Building its IPO Syndicate

Zepto is in the advanced stages of finishing its IPO syndicate and selecting more bankers, even though its IPO timeline is a few months off. According to a news report, JM Financial and Motilal Oswal have joined the IPO syndicate.

According to a well-known media organisation, these two are the other names in addition to Goldman Sachs, Morgan Stanley, and Axis Capital. The business had previously planned to raise $400–500 million for its IPO, but now it hopes to raise about $800 million.

Another probable reason Zepto is delaying its IPO is because it is feeling more at ease with its domestic shareholding pattern.

According to reports, domestic shareholders currently possess 43–44 per percent of Zepto, and the company is optimistic that it will have a majority Indian ownership by the time of its IPO or soon before.

Zepto is probably going to look into raising a sizable sum of money from foreign investors on the private market in the interim.