Quick commerce platform Zepto is expected to file draft papers as early as Friday for an initial public offering valued at about US $ 1.3 billion, or roughly Rs. 11,680 crore (US $ 1.30 billion), according to people familiar with the matter.
The four-year-old company plans to raise around Rs. 11,000 crore (US $ 1.22 billion) through the issuance of fresh shares, with the remaining portion of the IPO comprising an offer for sale by early investors.
Zepto is expected to submit its draft red herring prospectus under the Securities and Exchange Board of India’s confidential filing route, which would allow it to revise the size of the offering at a later stage. The company is targeting a stock market listing in the July–September quarter next year.
The company has appointed Morgan Stanley, Axis Capital, HSBC, Goldman Sachs, JM Financial, IIFL Securities and Motilal Oswal as bankers to the issue, with Morgan Stanley acting as the lead manager. Zepto did not respond to media queries on the proposed listing.
In the run-up to the IPO, the company has undertaken a series of cost-cutting measures. These include reducing between 800 and 900 roles through layoffs and unfilled vacancies, as well as cutting customer acquisition costs and corporate overheads.
Zepto enters the public markets amid intense competition in India’s cash-intensive quick commerce sector. Its two largest rivals are backed by listed parent companies—Eternal, which owns market leader Blinkit, and Swiggy, the parent of Instamart.
In October, Zepto closed a US $ 450 million funding round led by US pension fund CalPERS, of which approximately US $ 300 million was primary capital. In a December interview, Blinkit founder and chief executive Albinder Dhindsa said the public markets’ appetite to fund quick commerce expansion through balance-sheet capital was limited and that the sector would increasingly face scrutiny over sustainable growth.
A September note by BofA Securities estimated that Blinkit controlled more than 50% of India’s quick commerce market, with rivals including Zepto, Instamart, BigBasket, Flipkart Minutes and Amazon Now accounting for the remainder. Competitive intensity has also increased as Flipkart and Amazon scale up their own rapid-delivery offerings.
Flipkart Minutes is nearing 800 dark stores, while Amazon Now is adding two micro-warehouses daily across Delhi-NCR, Mumbai and Bengaluru. As of the end of September, Blinkit operated more than 1,800 dark stores, while Instamart and Zepto each ran around 1,000 to 1,100 outlets.
