Zepto puts IPO on hold amid cash burn concerns, plans to raise Rs 1,000 crore instead: Report

Quick commerce giant Zepto has put its initial public offering (IPO) on hold and is instead working to raise more than Rs 1,000 crore through a pre-IPO placement, according to media reports.

Under SEBI rules, companies preparing for an IPO can raise up to 20% of their proposed fresh issue through such a placement, but the amount raised gets deducted from the fresh issue size of the eventual IPO.

Reports said existing investors including Glade Brook, General Catalyst, Goodwater Capital, and Nexus Venture Partners may invest in the round.

It's worth noting that Zepto had initially planned to raise around Rs 8,000 crore through its IPO but has since trimmed this to between Rs 5,000 and 6,000 crore. The company confidentially filed its draft IPO papers with SEBI in December 2025, proposing a fresh issue of Rs 8,010 crore. Of the proceeds, about 45% was earmarked for expanding its dark store network and covering lease costs, 25% for technology and marketing, and the remaining 30% for acquisitions and general corporate purposes.

Zepto's valuation expectations have also fallen sharply. Domestic mutual funds evaluating the pre-IPO round, including SBI Mutual Fund, ICICI Prudential, Kotak, and HDFC, have been pricing the company between $2.5 billion and $3 billion post money, while other estimates for the round go up to $4.5 billion.

Even at the higher end, this is well below the $7 billion valuation at which Zepto raised $450 million in October 2025.

Reports further said that mutual funds evaluating the deal reportedly flagged concerns over Zepto's cash burn. The company was burning over Rs 900 crore per quarter at one point, leaving it with roughly three quarters of cash reserves. This has since been brought down to around Rs 700 crore per quarter, extending its runway by a couple of additional quarters.

Zepto is hopeful of returning to the public markets in the coming months with an improved profitability profile that could support a stronger valuation, according to reports. The company's IPO had earlier been expected around July 2026.

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has grown into one of India's largest quick commerce platforms through a dense network of dark stores offering fast grocery delivery.

According to a recent report by Emkay Global, Zepto has built a scaled quick commerce business but faces a steeper path to profitability than Swiggy Instamart. The brokerage said Zepto's low pricing strategy and low minimum order value have helped it acquire customers quickly, though raising average order values to improve margins could slow order growth.

Emkay ranks Zepto as India's second largest quick commerce player by net order value. Its FY26 net order value exceeded Swiggy Instamart's by 13% but remained 53% lower than Blinkit's. Zepto recorded the highest daily order density in the industry, averaging 2,117 orders per store in the fourth quarter of FY26, compared to 1,425 for Blinkit and 1,098 for Swiggy Instamart.

At the same time, Zepto reported the largest operating losses among major quick commerce companies. Its adjusted EBITDA loss stood at Rs 5,360 crore in FY26, compared to Rs 3,510 crore for Swiggy and Rs 280 crore for Blinkit.