Zappfresh Files RHP, IPO To Open On Sep 26

Meat delivery startup Zappfresh has filed its red herring prospectus (RHP) for its BSE SME initial public offering (IPO), which will solely consist of a fresh issue of up to 59.06 Lakh shares. The startup has retained the IPO size as per its DRHP, which was filed in August 2024.

The public offering will open on September 26 and close on September 30. 

The startup plans to utilise INR 50.7 Cr of the capital generated from the proceeds for marketing, capital expenditure and working capital. Out of this, INR 25 Cr will be used for working capital expenditure, INR 15 Cr for marketing. It has given an INR 15 Cr marketing contract to HT Media Platform.

It will use an unspecified amount from the IPO proceeds to fuel acquisitions and INR 10 Cr to set up six cold storage units to be located in Delhi, Mumbai and Odisha.

In the IPO, 3.31 Lakh equity shares (or 5.6% of the total issue) has been reserved for market makers, while 55.75 Lakh shares have been reserved for the public. 

Notably, 5% of the total issue size is mandated to be reserved for appointed market makers for SME IPOs. 

Founded by Deepanshu Manchanda in 2015, Zappfresh claims to procure fresh meat from farms and promises delivery under 90 minutes. While promoter Manchanda, who also cofounded Licious in 2014, holds the highest 37.64% stake in the company, other stakeholders of the D2C brand include Rajasthan Global Securities Pvt Ltd (6.73%), Gyan Enterprises (3.81%), Hindustan Media Ventures (3.58%). 

On the financial front, Zappfresh managed to increase its profit in the run up to the IPO. Its profit after tax zoomed 94% to INR 9.1 Cr in FY25 from INR 4.7 Cr in the previous fiscal year. Its top line surged past the INR 100 Cr mark. The company’s operating revenue grew 45% to INR 130.7 Cr during the year from INR 90.4 Cr in FY24. 

While Zappfresh earns a big chunk of its revenue from Delhi, the company has expanded into other Indian territories via acquisitions. While it entered Bengaluru in 2023 following the acquisition of Dr. Meat, it entered into a business transfer agreement with Mumbai-based Bonsaro in July 2024 to enter the country’s financial capital.