Zepto picks Goldman Sachs, Morgan Stanley and Axis Capital for its IPO

Zepto is a Singapore-headquartered company currently but is in the process of flipping its base back to India, a move that is mandatory for it to list here

Quick commerce startup Zepto has picked investment banks like Goldman Sachs, Morgan Stanley and Axis Capital as advisors for its initial public offering (IPO) that is set to launch in the second half of 2025, three people aware of the developments told Moneycontrol.

Zepto’s move to pick investment bankers comes shortly after it raised a whopping $1 billion in a span of about 60 days across two funding rounds, as reported exclusively by Moneycontrol. Zepto’s move to inch closer to a public market listing comes close on the heels of rival Swiggy’s plans to file its draft red herring prospectus (DRHP) over the coming days.

“Zepto is planning to list sometime in the second half of next year, around August 2025,” one of the people cited above said.

An increasing number of new-age companies are now going public as investors have begun rewarding tech companies that have shown potential to grow profitably. Ola Electric, FirstCry, Ixigo and several others have gone public over the past months and multiple other firms are queuing up to IPO.

“Zepto’s short-term profitability is good which has given the investors confidence that the company is an IPO-able asset,” a second person privy to the details told Moneycontrol. “The company will aim to raise $450-500 million through a fresh issue of shares as part of its IPO. The offer for sale (OFS) part is still unclear and will be decided upon at a later point in time,” he added.

Morgan Stanley, Axis Capital, Goldman Sachs and Zepto did not reply to Moneycontrol’s queries.

The investment bankers and Zepto are still working out the company’s valuation for its IPO. Zepto was last valued at $5 billion when it raised $340 million on August 30.

To be sure, Zepto is a Singapore-headquartered company currently but is in the process of flipping its base back to India, a move that is mandatory for it to eventually list on the bourses here.

“We’ve started the process of flipping back to India and will wrap it up in the next couple of months,” Zepto’s CEO Aadit Palicha had told Moneycontrol in an interview towards the end of June.

Competitive landscape

Zepto, which competes with Zomato’s Blinkit, Swiggy Instamart, Tata’s BigBasket, Flipkart Minutes, among others, has seen a surge of interest from investors, on the back of its execution chops and rapid growth in the last three years. Its gross merchandise value (GMV) has crossed $1.2 billion and is on track to turn profitable on an EBITDA basis in the coming months, Palicha had earlier said.

Rivals like Swiggy Instamart and Blinkit are at $1 billion and $1.6 billion GMV, respectively, as reported by Moneycontrol earlier.

Competition in India’s red-hot quick commerce space is only intensifying because of which the market has already grown to $5.5 billion in size in a span of three years, as per the analysts at Kotak Institutional Equities.

Top quick commerce players are increasing their footprint by adding more dark stores and also entering smaller towns as they go into a land-grab mode.

“Quick commerce (QC) industry is witnessing enhanced competitive intensity with new players such as Flipkart entering the fray and Bigbasket pivoting to a full QC model. Incumbents such as Zomato and Zepto are well-funded and have also announced plans to scale up their existing quick commerce businesses,” Kotak Institutional Equities said in an August 30 note to clients.

While Blinkit has said it will increase its number of dark stores to 1,000 by the end of FY25, Zepto plans to have 700 stores by the end of the current fiscal year. Swiggy Instamart is entering Tier II cities like Amritsar and Kanpur to grow its market share.

“Over the next 12 months, we expect competitive intensity to rise as players add stores in similar geographies and discounting/price competition increases. The three incumbents (Blinkit, Swiggy Instamart and Zepto), however, may witness more competition with new players Bigbasket, Flipkart and potentially Amazon, entering the fray,” the note concluded.