Zepto Gearing Up To File Its IPO Draft Papers In March-April: Report

Zepto Gearing Up To File Its IPO Draft Papers Soon: Report

SUMMARY

The National Company Law Tribunal (NCLT) will hear Zepto's reverse merger application on January 17, with the quick commerce unicorn planning to file its DRHP in the same month it receives domicile shift approval.

Zepto has scheduled a board meeting on January 19 to discuss IPO matters including banker appointments and has recently established Zepto Marketplace Private Limited, signalling a shift from B2B2C to a marketplace model.

The company has expanded to 35 cities with 650 dark stores, raised $1.3 Bn in funding last year, and aims to become the first independent quick commerce firm to go public in India.

Quick commerce platform Zepto is reportedly gearing up to file its initial public offering (IPO) draft papers in March or April this year.

The company has already obtained the necessary permissions to relocate its base from Singapore to India ahead of the public listing, as per ET’s report.

Details of the IPO are not finalised, and the company has called for a board meeting on January 19 to discuss which bankers to appoint, choosing independent directors, the size of the IPO and other finer points, the report added.

Notably, while Singapore authorities have cleared the move, the National Company Law Tribunal (NCLT) is scheduled to hear the matter on January 17, as per the report.

Sources at the company told Inc42, “The team is ready and focusing on filing the DRHP within the same month as getting the approval of the domicile shift.”

This comes at a time when Zepto has set up a new entit, Zepto Marketplace Private Limited, as part of its restructuring plans ahead of its much-anticipated IPO.

The new entity, registered in October last year, would potentially allow the company to pivot from its current B2B2C structure to a marketplace model, mimicking the approach taken by its rivals Zomato-owned Blinkit and Swiggy Instamart.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto currently operates under a B2B model. Its parent, Kiranakart Technologies, procures goods directly from brands and sells them exclusively to its licensee companies, including the likes of Geddit Convenience, Drogheria Sellers and Commodum Groceries.

The quick commerce firm earns revenue by levying a fee on these companies for using its brand and platform.

Zepto grabbed headlines last year after raising a whopping $1.3 Bn in funding and outpacing Blinkit and Swiggy Instamart in terms of revenue.

Amid the rising competition in the quick commerce space, the Palicha-led company is also doubling down on its presence in India. While Zepto was operational in seven cities in 2023, this number rose to 35 last year and its dark store count doubled to 650 from 300 earlier.

To keep up with its competitors and shore up its revenue, Zepto has also been expanding its cafe business. In line with this, the company recently announced the spin-off of Zepto Cafe into a separate app.

Zepto is among the growing list of Indian startups looking to shift their domiciles back to India from overseas. The reverse flip is part of the quick commerce giant’s plans to go public as soon as next year.

This comes at a time when quick commerce companies in the country are facing allegations of misusing foreign direct investment (FDI) norms and offering deep discounts to cover their operational losses.

At present, foreign direct investment is prohibited in the inventory-based model of ecommerce. It’s allowed only in firms that have taken a marketplace approach.

However, several industry bodies have accused quick commerce firms of exploiting loopholes in the existing FDI norms in their alleged bid to push through multi-brand retail. This has also triggered concerns of traditional Kirana store owners going out of business.