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Zepto Considers Increasing IPO Size to $1 Billion, Aims for Domestic Ownership Shift

• ByStartupStory     |    January 23, 2025

Quick commerce company Zepto is reportedly considering increasing its initial public offering (IPO) size to $800 million to $1 billion, including secondary shares, according to a report by The Economic Times.

The report states that Zepto CEO Aadit Palicha has recently engaged with major mutual funds to discuss the company’s public offering plans. Zepto anticipates reaching $5.5 billion in gross sales for the final quarter of FY26, with positive EBITDA (excluding ESOPs). “This projected figure is roughly equivalent to the total gross sales of the quick commerce industry for the previous calendar year,” the report cited brokers as saying.

IPO Planning and Fundraise Expansion

Zepto began planning its IPO in mid-2024, initially targeting $450 million in primary capital. However, the company is now considering an IPO size of approximately $800 million or more, with at least $300–400 million worth of shares potentially sold through an Offer for Sale (OFS), alongside an increased primary fundraise.

Rapid Growth and Expansion

Zepto has exceeded expectations by surpassing 900 dark stores, with plans to expand to 1,000 locations as part of its broader strategy to scale operations and achieve profitability. The company currently handles between 1.1 million to 1.3 million daily orders, and its non-grocery sales—including electronics, apparel, and general merchandise—are now contributing Rs 200 crore monthly.

A significant focus for Zepto is to boost domestic ownership, with an aim to achieve at least 40 per cent domestic shareholding before filing for its IPO. To facilitate this, the company is merging its Singapore parent entity with an Indian entity to shift its domicile to India.

Lead Banks and Market Competition

Investment banks Goldman Sachs and Morgan Stanley are among the lead advisors for Zepto’s IPO, with additional firms expected to join closer to the offering. Zepto raised $350 million in November 2024, bringing its total cash reserves to approximately $1.4 billion, positioning it to compete with rivals such as Flipkart Minutes in the rapidly growing quick commerce sector.

While the company’s IPO valuation remains uncertain, Zepto is reportedly considering Blinkit’s metrics for comparisons. Despite its strong growth trajectory, Zepto has incurred substantial losses, having spent Rs 1,000–1,100 crore over the past three months to compete with its top rivals. This investment helped Zepto achieve $3 billion in gross sales, just behind Blinkit’s $3.7 billion, while aggressively expanding its dark store network.

In comparison, Blinkit reported a 120 per cent year-on-year increase in gross order value for the December quarter, reaching Rs 7,798 crore, though it also faced an adjusted EBITDA loss of Rs 103 crore.

Zepto’s aggressive market expansion, focus on profitability, and efforts to increase domestic ownership position it as a strong contender in India’s quick commerce sector as it prepares for its highly anticipated IPO.

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