Zepto receives NCLT approval to reverse flip to India ahead of IPO this year

Internally, the schemes were approved during the company’s board meeting on October 3, 2024.

Kiranakart Technologies Private Limited can now proceed to become the holding company of quick commerce unicorn Zepto in line with the decision of its board of directors and shareholders, as per an order from the National Company Law Tribunal (NCLT).

“The Board of Directors of the Petitioner Company believes that the Scheme is in the best interests of the entity and their respective stakeholders including its shareholders, employees, and creditors,” the NCLT order dated January 9, 2025, said. Prior to this, the Indian entity was a subsidiary of Kiranakart Pte. Ltd which is based in Singapore.

Internally, the schemes were approved during the company’s board meeting on October 3, 2024.

The approval to shift its base back to India comes ahead of the company’s initial public offering (IPO) later this year. Zepto will look to raise around $400-500 million through its IPO and has picked Goldman Sachs, Morgan Stanley, Axis Capital as bankers, Moneycontrol had exclusively reported in September 2024.

Moneycontrol had also first reported on January 2 that Zepto has also incorporated a new marketplace entity to streamline its business. In fact, the NCLT order also said the Indian entity’s amalgamation will have benefits that will help optimise the company’s business structure.

“...rationalisation of the group structure by reducing the number of legal entities…to be more aligned with the business objective to achieve more business synergies, assist in faster decision making, ensure significant cost savings, creation of a focused platform for future growth,” the NCLT order said.

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The steps will simplify the holding structure which will enable future fund raising from Indian as well overseas investors, the order added.

In fact, in the run up to its IPO, the company has taken several other steps, including raising over Rs 2,900 crore from domestic investors like Motilal Oswal and more, to increase domestic shareholding. 

Apart from easier decision making and easing fundraise negotiations, the reverse flip will eliminate administrative functions and multiple record keeping functions which will help in reducing administrative, managerial and other common expenditure considerably which will augur well for the firm’s financial health, the NCLT order read.

Furthermore, the Indian entity will not require a no objection certificate (NOC) from the Reserve Bank of India (RBI), as is the case with some other reverse flips of this nature, the NCLT ruled.

The developments come shortly after Zepto has raised a total of $1.35 billion in back to back funding rounds to take on larger, publicly listed rivals such as Zomato, which also operates Blinkit and Swiggy which runs Swiggy Instamart in a red-hot quick commerce market.