Zepto has made progress towards its initial public offering (IPO) by submitting an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI). This filing brings the company closer to launching its anticipated IPO, which has generated significant interest among investors in India’s burgeoning quick-commerce sector. The competitive landscape in this sector sees firms striving to provide rapid delivery of groceries and essential items.

The updated DRHP indicates that Zepto’s IPO will encompass a fresh issue of shares valued at Rs 8,010 crore, alongside an offer-for-sale (OFS) of 113 million shares by current investors. Originally, Zepto had filed its IPO documents through SEBI’s confidential pre-filing process in December 2025, and reports suggest that it received the necessary regulatory approval earlier this year.

The company intends to list its shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The OFS component allows existing investors to reduce their stakes, with notable participants including Nexus Venture Partners, Contrary Capital, Kaiser Permanente, and Razor Capital.

Intended Use of Funds Raised

Zepto aims to allocate the funds obtained from the fresh share issue to bolster its operations and expand its reach throughout India. A considerable portion of the raised capital will be invested in establishing additional dark stores in both current and new markets. These dark stores serve as small fulfilment centres, enabling quick-commerce businesses to deliver orders efficiently.

In addition to dark store expansion, the raised funds will facilitate lease-related expenditures, technology investments, and cloud infrastructure development. Marketing initiatives will also be among the priorities, aimed at enhancing customer acquisition. This expenditure plan mirrors Zepto’s strategy to upscale its operations while enhancing its delivery network and overall customer experience.

The upcoming IPO will be conducted via a book-building approach, adhering to SEBI’s guidelines. According to the filing, a minimum of 75 per cent of the net offer will be designated for Qualified Institutional Buyers (QIBs), while up to 15 per cent is reserved for Non-Institutional Investors (NIIs). Retail investors will have access to up to 10 per cent of the net offer, with a specific reservation set aside for eligible employees.

Considerations for Potential Investors

While Zepto’s growth narrative is poised to capture considerable investor interest, potential investors are advised to scrutinise relevant financial metrics before making investment choices. One pivotal aspect will be the company’s financial health and its trajectory towards achieving profitability. Although quick-commerce enterprises have expanded significantly, they often require substantial expenditures on warehouses, delivery systems, discounts, and customer acquisition.

In the competitive quick-commerce arena, investors are likely to pay close attention to revenue growth, order volumes, and how well Zepto manages costs as the sector experiences increasing competition. The market has become more crowded, with numerous players investing heavily to secure market share.

Valuation will also be a crucial factor as pricing details are finalised. Investors will need to assess Zepto’s valuation relative to its growth potential and future earnings capabilities. The planned utilisation of the IPO proceeds is another area of interest, as the effectiveness of the company’s investments in dark stores and technological infrastructure could significantly influence its long-term success.

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