Zepto IPO Valuation Cut to $3B, Boosts Swiggy & Zomato Shares

Quick-commerce platform Zepto is reportedly considering a significantly lower initial public offering (IPO) valuation of around $3 billion. This revised target, down from its initial $5 billion goal and a previous $7 billion funding round, triggered rallies in competitor shares.

Shares of Swiggy and Eternal, Zomato’s parent company, both climbed by up to 5% on Tuesday, despite a generally muted broader market. Market analysts indicate investors are increasingly favoring companies demonstrating clearer paths to profitability.

Zepto’s Valuation Shift and Market Reaction

• Zepto’s current IPO valuation consideration: around $3 billion
• Initial IPO valuation target: $5 billion
• Last funding round valuation: $7 billion
• Eternal (Zomato) shares climbed: up to 4.78% intraday to ₹309.90, closing up 4.02% at ₹307.65.
• Eternal market capitalization: ₹2.97 lakh crore
• Swiggy shares surged: up to 5.4% intraday to ₹272.95, settling up 3.63% at ₹268.35.
• Swiggy company valuation: ₹74,073 crore

The notable reduction in Zepto’s valuation has positively impacted sentiment for listed quick-commerce players. This suggests investors anticipate a moderation in the intense cash-burning competition that has characterized the sector for years.

IPO Proceeds and Operational Strategy

Zepto’s draft red herring prospectus (DRHP) details plans to raise ₹8,010 crore through a fresh issue. The proceeds are earmarked for specific expansion and operational needs.

• 45% of proceeds: Expand dark-store network and fund lease rentals.
• 25% of proceeds: Allocate to technology, cloud infrastructure, and marketing efforts.
• 30% of proceeds: Designated for potential acquisitions and general corporate purposes.

Emkay Global on Profitability Challenges

According to Emkay Global, while Zepto has built a scaled quick-commerce business, it faces a greater challenge in improving profitability compared to Swiggy. The brokerage pointed out Zepto’s everyday low-price (EDLP) strategy with a low minimum order value has rapidly scaled its customer base.

However, this strategy could make retaining volumes harder as the company eventually raises order values to improve margins. Emkay Global highlights key performance metrics within the quick-commerce landscape in India.

Comparative Performance Metrics (FY26 / Q4 FY26)

• Zepto emerged as India’s second-largest quick-commerce player.
• Zepto FY26 Net Order Value (NOV): 13 percentage points higher than Swiggy Instamart.
• Zepto FY26 Net Order Value (NOV): 53 percentage points lower than Blinkit.
• Zepto Q4 FY26 orders per day per store: 2,117.
• Swiggy Instamart Q4 FY26 orders per day per store: 1,098.
• Blinkit Q4 FY26 orders per day per store: 1,425.
• Zepto FY26 adjusted EBITDA loss: ₹5,360 crore.
• Swiggy FY26 adjusted EBITDA loss: ₹3,510 crore.
• Blinkit FY26 adjusted EBITDA loss: ₹280 crore.
• Zepto Net Average Order Value (NAOV): ₹357.
• Swiggy Net Average Order Value (NAOV): ₹491.
• Blinkit Net Average Order Value (NAOV): ₹530.

Emkay Global anticipates Zepto will likely adopt a strategy similar to Swiggy’s, focusing on increasing average order values. This shift is crucial for mitigating its higher adjusted EBITDA losses compared to competitors.