Zepto said to plan filing for $500 million India IPO next week

Zepto IPO

Grocery delivery firm Zepto Ltd. is preparing to file for an initial public offering of about $500 million in Mumbai as early as next week, according to people familiar with the matter, as competition hots up in India’s quick-commerce market.

The company is working with Axis Bank Ltd., Motilal Oswal Investment Advisors Ltd. and the local units of Morgan Stanley, HSBC Holdings Plc, and Goldman Sachs Group Inc. to submit its draft prospectus through a confidential route, the people said, asking not to be identified because the information is private.

The 10-minute delivery platform’s offering is expected to include a fresh issue as well as secondary share sales by existing investors, with proceeds earmarked for expansion, the people said. Deliberations are ongoing and details including the size and timing of the IPO may still change, they said.

Representatives for Zepto, Goldman Sachs and HSBC declined to comment, while other banks didn’t respond to requests for comments.

India’s quick-commerce sector is undergoing rapid expansion, with startups racing to build dense networks of warehouses and delivery fleets to meet surging demand for groceries and household items. Global investors including SoftBank Group Corp. and Temasek Holdings Pte. have poured billions into the sector, making it the world’s most closely watched experiment in rapid deliveries.

Zepto competes with Amazon.com Inc.’s India unit and homegrown firms such as Swiggy Ltd., Zomato Ltd. and the Tata Group’s BigBasket. The proposed IPO follows Zepto’s $450 million fundraising in October, which valued the company at $7 billion.