Zepto Takes the Confidential IPO Route: Key Things To Know

Mumbai| 29 December

Zepto opts for the confidential IPO route

Zepto has confidentially filed its draft red herring prospectus with the market regulator, indicating preparations for a potential IPO in 2026. By choosing the confidential filing route, Zepto keeps its IPO plans flexible while keeping details of the document (DRHP) out of the public domain at this stage. The process allows the company to seek SEBI’s feedback privately, fine-tune issue size, pricing and timing, and gauge investor interest before making disclosures public.

This route has become popular among fast-growing digital firms that want regulatory feedback without immediate market scrutiny.

IPO likely to focus on raising fresh capital

The proposed IPO is expected to be largely a fresh issue, with Zepto looking to raise around ₹11,000 crore. The primary objective appears to be funding expansion rather than enabling large exits for early investors.
Proceeds are likely to be used to scale dark-store infrastructure, strengthen supply chains, invest in private labels. A limited offer-for-sale component may still be included, but growth capital remains the central theme.

How big is Zepto

As of September 2025, Zepto operated over 900 dark stores across major Indian cities and generated gross sales of nearly $3 billion, or about ₹26,000 crore. Since its launch, the company has raised around $1.8 billion in funding and is currently valued at approximately $7 billion.

The company’s rapid scale-up over a short period places it among the largest pure-play quick-commerce platforms in India.

Zepto achieved unicorn status in August 2023 after raising $200 million in a Series E round at a $1.4 billion valuation. Founded by Aadit Palicha and Kaivalya Vohra, the company scaled its 10-minute grocery delivery model rapidly across metros, betting on dense dark-store networks to drive speed and order frequency.

Revenue is rising fast, losses still matter

Zepto has reported sharp revenue growth over the past year, driven by higher order volumes and expansion across metros. However, losses have widened alongside growth, reflecting high delivery costs, discounts and infrastructure spending.

Only a portion of the company’s gross sales converts into operating revenue, keeping margins under pressure. Investors will closely watch whether scale begins to translate into better unit economics ahead of listing.

Dark stores remain the backbone of the model

Zepto’s strategy rests on dense dark-store coverage in urban markets. Smaller store formats and tighter delivery radiuses are designed to improve efficiency and reduce capital intensity compared with earlier models.

The company continues to expand selectively, focusing on cities where order density supports faster breakeven at the store level.

Listed rivals raise the competitive stakes

The IPO comes at a time when Zepto’s two largest rivals are already listed. Swiggy, which operates Instamart, and Zomato, which owns Blinkit, both have deeper balance sheets and larger store networks.

Competition remains intense, with aggressive pricing and promotions limiting profitability across the sector. Access to public market capital could help Zepto narrow this gap.

Regulatory and execution risks remain

The quick-commerce sector faces rising regulatory attention, particularly around food safety, labour practices and delivery standards. Any adverse observations during the IPO review process could weigh on sentiment.

Operationally, the challenge lies in balancing rapid expansion with tighter cost control, especially as discount-led growth becomes harder to sustain.

What investors should watch next

Key triggers ahead include the release of Zepto’s public offer documents, clarity on profitability timelines and disclosures around store-level economics.
Market conditions closer to the listing window will also play a role in determining valuation appetite.
(With inputs from news sources)

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