Zepto Eyes IPO in 2-3 Quarters, Skips New DRHP Filing

Quick commerce firm Zepto is targeting an Initial Public Offering (IPO) within the next two to three quarters. CEO and co-founder Aadit Palicha confirmed on July 31 that no fresh Draft Red Herring Prospectus (DRHP) filing is required for this revised timeline.

The company will instead submit updated financial statements as an addendum to its existing filing with SEBI. This move shifts their potential stock market debut to between February and May 2027, past the previously targeted August listing.

Pre-IPO Funding and Valuation Discrepancy

Zepto deferred its IPO after raising over Rs 1000 crore (more than $100 million) in a pre-IPO funding round. Existing investors Glade Brook, General Catalyst, Goodwater Capital, and Nexus Venture Partners participated.

This private funding became necessary as domestic mutual funds valued Zepto between USD 2.5 billion and USD 3 billion. This valuation fell short of the company’s internal target of USD 4 billion to USD 5 billion.

Improved Financials and Runway

Mutual fund houses like SBI Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, and HDFC Mutual Fund had previously flagged concerns. Their issues centered on Zepto’s high cash burn and aggressive expansion strategy.

The company previously spent over Rs 900 crore quarterly, with cash for approximately three quarters of operations. Zepto has since reduced its quarterly cash burn to around Rs 700 crore, extending its cash runway by about two additional quarters.

With improved financial metrics and a clearer path to profitability, Zepto plans to re-evaluate its IPO strategy. The goal is to secure a better valuation when the company eventually goes public.