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Kolkata: Zepto, the Bangalore-based quick commerce firm and one of he most recognized brands in this domain, is preparing to file draft papers to market regulator Sebi, reports have stated. The target is to raise more than Rs 5,000 crore, out of which Rs 4,000-4,500 crore will be through the issue of fresh equity. There will be an offer for sale as well, the amount of which has not been decided yet. As the name suggests, the confidential route is adopted by companies who want to maintain secrecy around the public issue till they make an official announcement. Companies use the secrecy to alter figures of the draft proposal as and when required depending on the market and internal conditions.
Zepto has appointed high-profile names such as Morgan Stanley, Axis Capital, HSBC, Goldman Sachs, JM Financial, IIFL Securities and Motilal Oswal to manage the public issue, the first-named being the lead banker. The timeline for listing of the shares has been mentioned as Q2 of FY27.
The quick commerce firm has also reportedly undertaken a few cost-cutting measures, one of which was in the form of cutting down 800-900 job roles. The company axed employees and did not fill up the vacant positions. This step spanned across contractual employees and 'permanent' staff. “The company has cut its customer acquisition spends as it focuses on existing users…this, combined with reduction in corporate overhead costs from the layoffs has resulted in monthly burn coming down to Rs 200-300 crore now from Rs 400-500 crore in June-July,” an anonymous person was quoted in the media as saying.
The objective of the entire effort was to reduce the rate of cash burn. Cash burn refers to the rate at which a company spends its cash reserves to meet operating expenses before generating positive cash flows.
In October, Zepto concluded the process of raising funds to the tune of $450 million. At that time its founder and CEO Aadit Palicha revealed that the primary funding valued the company at $7 billion. It was a big jump from the 2024 valuation of $5 billion. The investors in this round were mainly US-based pension fund California Public Employees' Retirement System (Calpers) and Silicon Valley venture capital fund General Catalyst apart from continuing investors such as Avenir, Gladebrook, Lightspeed and the Stepstone group. Instamart, which is operated by Swiggy, is a competitor to Zepto.
