 "Zepto set to raise IPO size to $800 mn-$1 bn, targets $5.5 bn sales by FY26")
Quick commerce company Zepto is considering increasing its IPO size to between $800 million and $1 billion, including secondary shares, according to a report in The Economic Times.
CEO Aadit Palicha has recently met with major mutual funds to discuss the company's public offering plans, which include an anticipated $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 said citing brokers.
The company began its IPO planning in mid-2024, initially targeting $450 million in primary capital. The report quoted a source as saying that the company is looking at a range of around $800 million or more, with at least $300–400 million in shares potentially sold in an Offer for Sale (OFS), along with an increased primary fundraise.
Zepto’s success
Zepto has exceeded expectations by surpassing 900 dark stores, setting its sights on expanding to 1,000 locations. This progress is part of a broader strategy to focus on scaling the business and ensuring profitability. The daily order volume at Zepto currently ranges between 1.1 million and 1.3 million. The company’s sales from non-grocery items like electronics, apparel, and general merchandise now contribute Rs 200 crore monthly.
Another key goal for Zepto is to boost its domestic ownership. The company aims for at least 40 per cent domestic shareholding before filing for its IPO. As part of this process, Zepto is merging its Singapore parent company with an Indian entity to shift its domicile to India.
Goldman Sachs and Morgan Stanley are among the lead banks for Zepto’s IPO, with plans to add more firms closer to the offering.
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Zepto raised $350 million in a funding round in November 2024, bringing its total cash reserves to around $1.4 billion as it competes with rivals like Flipkart Minutes in the rapidly growing sector.
The valuation for Zepto’s IPO is still uncertain, but the company is considering comparisons to Blinkit’s metrics.
Despite its growth, Zepto has incurred significant losses, spending around Rs 1,000–1,100 crore over the last three months to compete with its top rivals. This heavy burn rate allowed Zepto to reach $3 billion in gross sales, falling just behind Blinkit’s $3.7 billion, while expanding its dark store network in both established and new markets, the news report said.
In contrast, 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 a Rs 103 crore adjusted Ebitda loss.