Zepto’s IPO: Will 10-Minute Delivery Model Withstand Public Market Evaluation?
NEW DELHI: Zepto, a quick-commerce platform founded by Aadit Palicha and Kaivalya Vohra, has filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) that could raise up to Rs 80,100 million. The company, which began as a grocery aggregator in 2020, pivoted to a hyper-local dark store model and has since grown to process over 640 million orders annually. With 1,139 dark stores and 75 warehouses, Zepto serves nearly 48 million annual transacting users as of March 2026.
IPO Details and Management
The IPO will include a fresh issue of shares and an offer for sale by existing investors, managed by a consortium of financial institutions including Axis Capital and Goldman Sachs India Securities. The quick-commerce sector has evolved significantly since its pandemic-era inception, now representing one of India’s fastest-growing consumer internet segments. However, questions remain about the sustainability of profits for leading players in this competitive market.
Financial Performance
Zepto’s revenue from operations more than doubled to Rs 22,623 crore in FY26, up from Rs 11,109 crore in FY25. The company also saw its annual transacting users increase from 38.38 million to 47.97 million during the same period. Industry estimates suggest that India’s quick-commerce market could grow from approximately $1.6 billion in 2022 to between $60 billion and $83 billion by 2030.
Key Operating Metrics
A critical metric for Zepto is its order density, which indicates the number of orders processed per dark store daily. According to Nomura’s analysis, Zepto leads its competitors in this area, with an order per day per dark store (OPD/store) of around 2,140. This figure is approximately 60% higher than that of Blinkit and 100% higher than Instamart. However, Zepto’s average order value has remained flat at around Rs 387 over the past 12 quarters, contrasting with the growth seen by its competitors.
Profitability Challenges
Despite strong operational metrics, Zepto has not yet achieved profitability. The company reported an adjusted EBITDA loss of about Rs 12.5 billion in the March quarter of FY26, with a full-year adjusted EBITDA loss of around Rs 50.4 billion. The DRHP indicates that Zepto has incurred losses since its inception, raising concerns about its ability to sustain growth and achieve profitability.
Advertising Revenue Potential
Investors are closely monitoring Zepto’s advertising revenue, which accounted for about 7.88% of its net receivable value in FY26. Analysts believe that advertising could become a significant driver of future profitability, given its higher margins compared to core grocery deliveries.
Competitive Landscape
The quick-commerce sector remains highly competitive, with major players like Amazon and Flipkart ramping up their investments. Kotak Institutional Equities reports that the three largest quick-commerce players ended FY26 with around 4,525 stores and a combined net merchandise value of Rs 277 billion. Despite the competition, Zepto plans to add 1,904 dark stores between FY27 and FY30.
Governance and Regulatory Issues
Investors are also expected to scrutinize governance and regulatory disclosures in Zepto’s DRHP, which includes information about FEMA-related summons issued to the founders. The company’s compliance with regulatory standards will be a key focus for public-market investors.
Market Performance of New-Age Startups
The performance of new-age startup IPOs has been mixed, with several trading below their issue prices. As of June 15, 2026, five out of nine significant new-age internet-based IPOs are underperforming. The experiences of companies like Paytm and Swiggy have highlighted the importance of profitability and governance standards in the eyes of investors.
The investment debate surrounding Zepto ultimately hinges on whether quick commerce can achieve sustainable profitability at scale.
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