Zepto may cut IPO size by 20%; investor bids peg valuation at $3.5-4 billion: sources

Quick commerce firm Zepto is considering reducing the size of its initial public offering (IPO) by around 20%, raising around $650-700 million in fresh capital against the originally planned $850 million (Rs 8,010 crore), three people in the know told ET.

The move comes amid strong pushback from capital market investors over the company's valuation, which is expected to be sharply lower, at $3.5-4 billion. Zepto had closed a $450-million round in October 2025 led by US pension fund Calpers, which then valued it at $7 billion.

The company is expected to announce its price band over the next seven to eight days, another person said. Sebi (Securities and Exchange Board of India) rules require companies to refile their draft prospectus if the issue size changes by more than 20% from the original estimate.


“Domestic mutual funds have been pushing hard for a rationalised pricing… around 40% of the anchor book is reserved for domestic institutional investors as per Sebi norms,” one of the persons cited above said.

Considering the overall market volatility and Zepto’s mounting cash burn, domestic investors are understood to have pushed for a correction in the company’s valuation.

Also Read: Inside Zepto's profit push ahead of its IPO

Zepto, filed confidentially for its IPO in December 2025, received approval from Sebi in May. It subsequently filed an updated draft red herring prospectus for an Rs 8,010 crore — or about $850 million — issue, comprising primarily of fresh capital. The issue also includes an offer-for-sale component, where investors such as Nexus Venture Partners are offloading a small stake.

The Bengaluru-based company is tapping the public markets amid intensifying competition in the quick commerce sector. ET reported in June that while Zepto trails only Eternal-owned Blinkit in order volumes, analysts and industry executives have flagged its aggressive pricing strategy as coming at the expense of monetisation.

Zepto reported an adjusted Ebitda loss filed confidentially for its IPO, compared with losses of Rs 3,500 crore at Swiggy's Instamart, and Rs 277 crore at Blinkit. Other players in the segment include Amazon, Flipkart, Tata Digital-backed BigBasket, and Reliance Retail's JioMart.

As of March 31, Zepto had a cash balance of Rs 5,681 crore, according to its draft prospectus. Brokerages have said this underscores the company's need to raise fresh capital, prompting it to proceed with the IPO at a valuation lower than previously expected.

Founded in 2021, Zepto is backed by the likes of Nexus Venture Partners, Glade Brook, Motilal Oswal, Lightspeed, and General Catalyst.

Zepto did not respond to ET’s queries.

Axis Capital, Morgan Stanley, Goldman Sachs, Motilal Oswal, HSBC, JM Financial, and IIFL Capital are the merchant bankers for Zepto’s IPO.