Rapido founders shed 'promoter' tags for IPO, joining a growing trend among new-age firms

The reclassification is an exercise in preparation for Rapido’s public market debut in FY27, said an investor aware of the company’s plans. "The company will soon start its IPO process and hire bankers," the investor said on condition of anonymity. Rapido follows other new-age companies where founders were reclassified as non-promoters to ease their compliance burden after listing, with benefits ranging from favourable board compositions to getting easier approval for their compensation. The board of Roppen Transport Services Private Ltd, the company that operates Rapido, approved the reclassification of Sanka, Guntupalli and Rishikesh as non-promoter shareholders on 20 August 2025. This followed an application made by the co-founders on 13 August 2025. “While the Company was still in its initial stages (the co-founders) were classified as promoters of the Company. Since then, and as the Company has grown and progressed, it is now professionally managed, with the board of directors of the Company offering guidance from time to time," the board noted in a letter to the Registrar of Companies on 16 December. “Currently, the operations and compliances of the Company have been on auto-pilot mode similar to any other well-established corporate organization." The board said it considered three factors before approving the application – that each of the co-founders did not hold more than 10% of the company’s total voting rights, that they did not exercise control over the company’s affairs and that they did not have any special rights specifically attributable only to them through formal or informal arrangements. Sanka continues as chief executive officer of Rapido. Rapido did not respond to Mint’s request for a comment. Companies without promoters Other founders who have given up their promoter tags include those of Swiggy Ltd, Zomato’s parent company Eternal Ltd, FirstCry’s parent BrainBees Solutions Ltd, Delhivery Ltd, Policy Bazaar’s parent PB Fintech Ltd and soon-to-be listed Aye Finance Ltd. When founders become non-promoters, it impacts how the company’s board is composed and how their compensation is decided. If a non-promoter, non-executive director serves as the chairperson of the board of directors, then only a third of the board needs to be composed of independent directors. If a promoter or an executive serves as the chairperson, half of the directors must be independent, said Gaurav Pingle, a company secretary based in Pune. “Also, in case of payment of remuneration to a non-promoter executive director, there is no mandatory requirement of obtaining approval of shareholders by special resolution," Pingle explained. As promoters, the compensation of the founders would need to be ratified by minority shareholders, bringing additional scrutiny and uncertainty. Promoters would also have to disclose details of shares encumbered or pledged by them, Pingle said. This rule is not applicable to non-promoters. Yashojit Mitra, a partner at Economic Laws Practice, said promoters are generally considered to be persons in control of the business and affairs of a company and face more stringent compliance and disclosure requirements. So, founders who cease to fall within the definition of ‘promoter’ by divesting their stake often apply to be de-classified as promoters as per the Regulation 31A of Sebi (LODR) Regulations, 2015, he said. “This de-classification allows them the flexibility to be like any other investor with fewer statutory restrictions and liabilities attached," he said. Capital infusion Founded in November 2015, Rapido raised its last sizeable round of capital in 2024 when it secured $200 million in its series E funding round led by WestBridge Capital at a valuation of $1.1 billion, marking its entry into the coveted unicorn club or a startup with a billion-dollar valuation. New investors including Think Investments and Invus Opportunities and existing investor Nexus Ventures participated in the round. With the fresh capital infusion, the Bengaluru-based company outlined plans to expand operations across India and scale up its technology platform to enhance service delivery. It also highlighted its plan to widen its operations across all categories, including bike taxis, three-wheelers and taxicabs. The company reported operating revenue of ₹934 crore in FY25 compared with ₹648 crore a year earlier. Its loss narrowed to ₹258 crore from ₹371 crore in FY24, as per an Entrackr report in January. Last year, Swiggy fully divested its ₹2,400 crore stake in Rapido, selling the shares to Dutch investment firm Prosus NV and WestBridge Capital. Rapido’s rise has been swift. From a two-wheeler ride-hailing service, it expanded into autos, cars, and most recently, food delivery under its “Ownly" brand. By charging restaurants almost half the commission imposed by incumbents Swiggy and Zomato, Rapido is attempting to wedge open India’s tightly controlled food-tech market. The move capitalizes on data and operational insights it gained through its earlier partnership with Swiggy, where Rapido’s fleet was often deployed for last-mile delivery.