Quick Commerce Major Zepto Clears ₹11000 Crore Fundraise Before Confidential IPO Move

Quick Commerce Major Zepto Clears ₹11000 Crore Fundraise Before Confidential IPO Move

Why in News? 

Quick commerce firm Zepto has moved closer to the public markets with a decisive board approval to raise up to ₹11,000 crore. The plan combines a fresh equity issue with an offer for sale, signaling maturity and readiness for a confidential IPO journey in India’s fast-growing quick-commerce sector.

Zepto’s Fundraising Plan

• Zepto, a leading Indian quick-commerce company, recently gained board approval to raise up to ₹11,000 crore before its planned public market debut. This capital raise is structured to include both fresh equity issuance and an Offer for Sale (OFS) by existing shareholders. 
• The move is part of Zepto’s strategic push toward filing a confidential draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on December 26, 2025, ahead of an expected 2026 IPO. 
• In the context of Zepto’s planned fundraising, a fresh equity issue refers to the company creating and selling new shares to investors. These new shares will inject fresh capital into Zepto’s balance sheet.
• Before this ₹11,000 crore fundraising plan, Zepto had already completed sizable private funding rounds. In October 2025, the company raised USD 450 million (about ₹3,757.5 crore) at a valuation of approximately USD 7 billion in its latest round led by institutional investors such as the California Public Employees’ Retirement System (CalPERS). 
• Since its founding in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has rapidly scaled its quick-commerce model across major Indian cities. By September 2025, it operated over 900 dark stores.
• By structuring its IPO with both fresh equity and OFS, Zepto aims to balance capital infusion with investor liquidity. The fresh funds will help sustain growth in a competitive quick commerce market that includes players like Blinkit (Zomato) and Instamart (Swiggy) already listed in Indian stock markets.

Financial Performance Trends Leading into the IPO

• Zepto reported a substantial increase in revenue for the fiscal year ended March 2025 (FY25). In that year, the company’s total turnover, including other income, reached around ₹9,668.8 crore. This figure was almost double the ₹4,223.9 crore Zepto recorded in the previous fiscal year FY24, nearly 129 percent year-on-year increase.
• In earlier periods, Zepto had also shown strong growth. For instance, in FY24, the company more than doubled its revenue from the prior year, moving from around ₹2,026 crore in FY23 to approximately ₹4,454 crore in FY24.
• For FY25, the company recorded a net loss of approximately ₹3,367.3 crore, compared with a net loss of around ₹1,214.7 crore in FY24. This rise in net loss by about 177 percent reflects the high cost of rapid expansion.
• Quick commerce firms typically recognise only a fraction of gross merchandise value (GMV) as revenue, often around 15–20 percent of total orders processed. Based on this, Zepto’s operational revenue for FY25 may be estimated at around ₹1,495–₹1,994 crore, despite the headline turnover figure near ₹9,668 crore. 

Confidential IPO Route

• The confidential IPO route allows a company to submit its Draft Red Herring Prospectus (DRHP) to the market regulator without making it public at the initial stage. 
• In India, this facility is overseen by the Securities and Exchange Board of India (SEBI). The company shares detailed financial and business information only with the regulator. 
• SEBI formally introduced the confidential pre-filing mechanism in November 2022 through amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations. The move aligned Indian capital markets with global practices seen in the United States and other mature markets.
• Under SEBI rules, companies using the confidential route must still meet all eligibility norms for an IPO. The firm must submit a complete DRHP with audited financial statements and risk disclosures. 
• SEBI permits companies to keep the confidential filing valid for up to 18 months from the date of observations. Within this period, the issuer can launch the IPO when conditions appear favorable.
• Once SEBI issues observations, the company must make the DRHP public at least 21 days before opening the IPO. This ensures transparency and gives investors time to evaluate the offer.
• The confidential route gives firms greater strategic control over timing and disclosures. If market conditions turn volatile, the issuer can delay or modify the offering without reputational damage. This flexibility is valuable during periods of global uncertainty.

Quick Commerce Sector in India

• The quick commerce sector in India has grown from a niche concept to a significant part of the modern retail ecosystem.
• Between FY22 and FY24, the sector’s Gross Merchandise Value (GMV) climbed from around USD 0.5 billion to about USD 3.34 billion, a 280 percent surge over two years. 
• The sector’s CAGR during this phase was more than 70 percent, indicating a sharp shift towards rapid delivery services. Projections suggest this market could reach nearly USD 9.95 billion by 2029, underscoring sustained expansion opportunities.
• By 2025, quick commerce had accounted for roughly 70 – 75 percent of all e-grocery orders, a dramatic rise from approximately 35 percent in 2022. This shift reflects strong consumer demand for speedy delivery
• According to industry estimates, the Indian quick commerce segment is projected to be worth about ₹64,000 crore (around USD 7.3 billion) in FY25 and could triple to approximately ₹2 lakh crore by FY28. 
• Urban customers increasingly use these platforms for daily essentials like milk, vegetables, and snacks as well as last-minute needs. Tier-II and tier-III cities are emerging as significant contributors to order volumes, signalling a geographic shift in quick commerce adoption beyond major metros.