Zappfresh IPO Extended Till October 6 After Undersubscription

Meat delivery company Zappfresh’s initial public offering (IPO) has been extended to October 6 (Monday) after the issue was undersubscribed. 

Zappfresh parent DSM Foods has also reduced its BSE SME IPO price band to INR 95-100 from INR 96-101.

As a result, the company would be raising INR 59.1 Cr at the higher end of this price band. The fundraise will be at a valuation of around INR 223 Cr. 

While the IPO was originally slated to end on September 30, the extension has come because the Zappfresh issue received bids for 22.44 Lakh shares against 42.39 Lakh shares on offer. This translates to a 52% subscription. 

Zappfresh tweaked its pricing and extended the window for subscriptions after receiving muted interest from investors. 

The company’s IPO comprised a fresh issue of 59.06 lakh shares. It raised INR 16.8 Cr in its anchor round by allocating 16.7 Lakh equity shares to 11 anchor investors at INR 101 apiece. Further, 3.31 Lakh shares of the company were earmarked for market makers.

Qualified institutional buyers (QIBs) portion was fully subscribed, with bids for 11.16 Lakh shares on offer. 

However, non-institutional investors (NIIs) and retail investors showed less enthusiasm for the IPO. 

The former group bid for 2.76 Lakh shares as against 8.38 Lakh shares reserved, resulting in a 33% subscription. Retail subscription was just 27%, with 5.20 Lakh buds coming in for the 19.54 Lakh shares reserved.

Zappfresh was founded in 2015 by Deepanshu Manchanda, who also cofounded Licious. It sources fresh meat directly from farms and promises delivery within 90 minutes. It operates across Maharashtra, Karnataka, Uttar Pradesh, Delhi, and Haryana, counting the likes of Licious, FreshToHome, Meatigo, and Captain Fresh among its counterparts. 

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.