Zepto secondaries: Motilal Oswal and Raamdeo Agrawal both personally buy shares worth $100 million

Raamdeo Agrawal, co-founder, MOFSL

Motilal Oswal and Raamdeo Agrawal, founders of Motilal Oswal Financial Services Limited (MOFSL), have both, in their personal capacity, bought shares worth $50 million (around Rs 425 crore) each in quick commerce unicorn Zepto, people aware of the developments told Moneycontrol.

The secondary share sales, totally amounting to $100 million, comes at a time when Zepto is increasing domestic ownership to become a firm which is majorly owned by Indian investors.

Oswal and Agrawal have both bought shares from early backers, mostly foreign investors, of Zepto which includes the likes of Rocket Internet, Lachy Groom and the others, sources said.

Apart from the current round, Motilal Oswal, the firm, is also preparing to lead a secondaries round to the tune of $250 million in Zepto, as reported by Moneycontrol earlier. The firm will pool in money from its domestic investors and buy shares from Zepto’s foreign investors to shore up domestic ownership, sources added.

Edelweiss and Hero Fincorp will also participate in the $250 million round where shares of Zepto will potentially change hands.

The transactions value Zepto at $5 billion, unchanged from its previous round.

Zepto, Motilal Oswal, Edelweiss, Hero Fincorp, Rocket Internet and Lachy Groom did not reply to Moneycontrol's queries.

Zepto's shares are changing hands, going from foreign investors to domestic ones, at a time when becoming an Indian entity is crucial, especially because it unlocks new business capabilities.

Zepto's key rival, Eternal-owned Blinkit, recently said it is preparing to overhaul the company's operating model by taking direct ownership of inventory – a move now feasible after receiving board approval to be classified as an Indian-owned and controlled company (IOCC).

So far, all quick commerce firms have operated a marketplace model.

Blinkit said under a full inventory-ownership model, Blinkit’s working capital requirement for FY25 would remain under Rs 1,000 crore – roughly 5 percent of its projected net order value (NOV) of Rs 22,000 crore – thanks to high inventory turnover.

“As an IOCC, we now have the option to also own inventory in the quick commerce business,” Eternal CFO Akshant Goyal said in the shareholder letter. “We believe that is important, and is another concrete step towards making our business more resilient in the long term.”

However, another rival, Swiggy Instamart, does not see it as a viable option yet.

“From an overall economics standpoint, we believe the magnitude of difference can't be more than 30-35 basis points. But it comes on the back of inventory holding on your balance sheet. So, it is a choice to be made on the commercial model,” Swiggy CFO Rahul Bothra said. 

“The commercials don’t necessarily justify for you to make any inorganic way to get there,” Bothra said. While he didn’t rule out a future transition – “we may also want to consider it…when we believe it is the right time” – he emphasised that there is “no plan in the near future.”

Zepto, the second-largest player in the space, is on a fundraising spree at a time when quick commerce is booming and investors are rushing to grab a piece of the pie.

ALSO READ: Blinkit, Zepto and Swiggy Instamart scale to over 4 million daily orders in March; more than double YoY