ETtech Explainer: Inside Zepto's IPO U-turn
Zepto has paused its IPO and plans to refile its draft papers after two to three quarters. The decision follows months of valuation negotiations, investor pushback and shifting market conditions. Here's a look at the key events, from its confidential filing to the final decision, that led to the pause.
India's first standalone quick commerce company, Zepto, has decided to put a hold on its initial public offering (IPO) plans for now. The company intends to submit revised financial documents with its filing. Here's how we got here.
In December 2025, five-year-old Zepto officially applied for an IPO with the Securities and Exchange Board of India (Sebi). They aimed to raise approximately Rs 11,000 crore through a new share issuance, complemented by an offer for sale from existing investors. Zepto's CEO, Aadit Palicha, aimed for the company to become fully profitable by FY2028-29, while aiming for 25-30% growth each quarter.
Sebi approved the IPO in May, but the company's share price dropped around 30% that month, indicating a weakening investor sentiment. This was the first sign for analysts that investor confidence was weakening. The company was valued at around Rs 38,000 crore at the time. Despite the setback, Zepto continued to reduce its cash burn rate, which fell to Rs 850-900 crore in the January-March quarter from around Rs 1,200-1,300 crore a few quarters prior.
In early June, Zepto submitted updated IPO papers for a $1 billion (Rs 9,500 crore) offering. However, public market investors pushed back against the company's valuation, which they expected to be around $3.5-4 billion. This was significantly lower than the $7 billion valuation at which Zepto raised $450 million in October 2025.
Valuation talks hit a dead end in July when Zepto began negotiating the pricing of its IPO and considered delaying the listing. Institutional investors were insisting on a valuation in the $2.5-3 billion range, much lower than the original $3.5-4 billion estimate and less than half the $7 billion valuation from the company's last funding round.
On July 31, CEO Palicha addressed employees during a town hall and announced that Zepto would refile its IPO papers after two to three quarters. Instead of going public immediately, the company would first raise fresh private capital from existing domestic investors before returning to the public markets. They intend to raise around Rs 1,000 crore, although the final amount is still uncertain.
Palicha emphasized that the inability to secure favorable public market terms should not be viewed as a reflection of the company's performance. As of March 31, Zepto had Rs 5,681 crore in cash, but still reported an operating loss of Rs 1,247 crore for the January-March quarter.
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