Blinkit-Rival Zepto Gears Up for $1 Billion IPO, Expanding Rapidly

Zepto, the emerging leader in India’s quick-commerce market, is preparing for a significant milestone—its initial public offering (IPO). According to reports, Zepto is planning to increase its IPO size to between $800 million and $1 billion, including secondary shares.

Major IPO Plans Underway

The Zepto’s CEO, Aadit Palicha, has been actively engaging with leading mutual funds, discussing Zepto’s public listing strategy. Palicha has forecasted gross sales of $5.5 billion for the final quarter of FY26, with a strong focus on achieving positive EBITDA (excluding ESOPs).

Remarkably, this projection is on par with the total gross sales of the quick commerce industry for the previous calendar year, signaling Zepto’s ambition to dominate the market.

Zepto’s Growth and Expansion Strategy

Rapid Expansion Through Dark Stores

Zepto has exceeded expectations by operating over 900 dark stores and plans to expand further by reaching 1,000 locations. This extensive network ensures faster deliveries and improved customer satisfaction, giving Zepto an edge over its competitors like Blinkit and Flipkart Minutes.

Rising Daily Order Volumes and Diversified Revenue

Currently, Zepto handles between 1.1 million and 1.3 million orders daily, showcasing its robust logistics and customer demand. Additionally, the company is diversifying its offerings beyond grocery items. Sales of electronics, apparel, and general merchandise contribute around ₹200 crore monthly, strengthening its revenue stream and paving the way for profitable growth.

Domestic Ownership and Relocation to India

Increasing Domestic Ownership Pre-IPO

In preparation for the IPO, Zepto is working towards increasing its domestic ownership to at least 40%. This move aligns with India’s regulatory and investor preferences, enhancing the company’s appeal to local stakeholders.

Relocation from Singapore to India

Zepto is also in the process of merging its Singapore-based parent company with an Indian entity, effectively moving its domicile to India. This relocation underscores its commitment to aligning with Indian market dynamics and government policies.

Leading Investment Banks on Board

Global financial giants Goldman Sachs and Morgan Stanley are serving as lead banks for Zepto’s IPO. The company plans to onboard more financial firms closer to the offering date to strengthen its financial backing.

Financial Performance and Market Competition

Strong Cash Reserves Amid Losses

In November 2024, Zepto raised $350 million in a funding round, boosting its cash reserves to approximately $1.4 billion. Despite its robust growth, the company has posted losses of ₹1,000–₹1,100 crore over the past three months. This high burn rate reflects Zepto’s aggressive efforts to compete with rivals such as Blinkit and Flipkart Minutes.

Impressive Market Performance

Zepto’s strategy of high cash burn has paid off, enabling it to reach $3 billion in gross sales. The company continues to expand its dark store network in both mature and emerging markets, solidifying its market presence.

Conclusion

Zepto's ambitious plans for a $1 billion IPO underline its aggressive growth strategy and determination to lead India’s quick-commerce market. With a robust daily order volume of up to 1.3 million, expanding dark store networks, and diversification into non-grocery sales, Zepto is positioning itself as a formidable player in the industry.

The company’s efforts to increase domestic ownership and relocate its domicile to India reflect its commitment to aligning with local regulations and investor expectations. Backed by global financial giants like Goldman Sachs and Morgan Stanley, Zepto’s IPO could be a turning point for the company and the quick-commerce sector. However, with steep competition and a high burn rate, the road ahead remains challenging yet full of promise.