Zetwerk IPO subscribed 3 times, retail portion falls short

Business-to-business manufacturing platform Zetwerk’s Rs 5,012-crore initial public offering (IPO) was subscribed 3.06 times on Monday, its final bidding day, with institutional demand driving the sale while the retail portion remained undersubscribed.

Qualified institutional buyers bid 4.73 times their allocation and non-institutional investors 1.40 times, according to BSE. Retail bids covered 73% of the shares reserved for them. Overall, investors sought 566.3 million shares against 182.9 million on offer, excluding the anchor allocation.

The response was more modest than for last year’s largest startup offerings. Meesho’s Rs 5,421-crore IPO in December was subscribed 81.76 times, while Lenskart’s Rs 7,278-crore issue and Groww’s Rs 6,632-crore offering in November drew bids of 28.26 times and 17.6 times, respectively.


Zetwerk is the largest new-age IPO since Meesho, adding an industrial manufacturing platform to a listed startup cohort largely associated with consumer internet and financial services. It supplies industrial and consumer products to businesses through its own factories and a network of third-party manufacturers.

That model brings a different set of financial demands. Suppliers and production need funding before customers settle invoices, tying up cash as orders grow. Its borrowings fund working capital, vendor purchases and capital expenditure, according to the prospectus.

At March-end, the company operated 26 owned manufacturing facilities and worked with nearly 7,000 third-party suppliers. Revenue fulfilled through its own facilities rose to 33.2% of manufacturing revenue in fiscal 2026 from 7.1% two years earlier.

“There is not enough capacity in the country to service the kind of volumes that we are seeing,” cofounder and chief executive Amrit Acharya told ET in an interview last week, explaining the company’s move towards owned manufacturing.

Zetwerk’s operating revenue rose 40% to Rs 15,913 crore in fiscal 2026. In the June quarter, revenue grew 55% year-on-year to Rs 4,118 crore, while adjusted Ebitda more than tripled to Rs 103 crore, its red herring prospectus showed.

The company posted a June-quarter net loss of Rs 733 crore, of which Rs 669 crore came from the civil infrastructure business it has discontinued. The rest of the business lost Rs 64 crore. It used Rs 506 crore in cash to fund operations during the quarter, down from Rs 796 crore a year earlier. For the full fiscal year 2026, it had used Rs 682 crore.

“Q1 is typically a negative cash flow quarter. It is an investment quarter where capital gets invested,” Acharya said. “As a business, we operate on the annual cycle.”

Outstanding loans rose to Rs 3,366 crore as of August 31 from Rs 2,992 crore at May-end.

The IPO comprises a Rs 2,830-crore fresh issue and a Rs 2,182-crore offer for sale by existing shareholders, including Peak XV Partners, Accel, Lightspeed Venture Partners and Kae Capital. The company will use Rs 2,160 crore, or 76% of fresh proceeds, to repay borrowings of the parent and nine subsidiaries. About Rs 670 crore remains before issue expenses for acquisitions and general corporate purposes.

Zetwerk had raised Rs 2,251 crore from anchor investors, including Capital Group, BlackRock and Goldman Sachs, before public bidding opened on October 15. Its Rs 143-151 price band implies a valuation of Rs 25,583 crore at the upper end. The shares are scheduled to list on October 23.