Zepto Selects Goldman Sachs, Morgan Stanley, and Axis Capital for Upcoming IPO

Zepto, a quick commerce startup, has selected Goldman Sachs, Morgan Stanley, and Axis Capital as advisors for its initial public offering (IPO), expected to take place in the second half of 2025, according to sources cited by Moneycontrol.

This decision follows Zepto's recent fundraising of $1 billion across two rounds within 60 days, moving it closer to a public listing. This move comes as its competitor Swiggy prepares to file its draft red herring prospectus (DRHP).

A source noted, "Zepto is aiming for an IPO around August 2025." The trend of tech companies going public is on the rise as investors reward firms with strong growth potential, like Ola Electric, FirstCry, and Ixigo, which have recently gone public. Several other companies are also planning their IPOs.

"Zepto’s strong short-term profitability has reassured investors of its suitability for an IPO," another source stated. The company aims to raise $450-500 million through a fresh share issue, while details regarding an offer for sale (OFS) are yet to be finalized. However, Zepto and its investment banks are still determining the company's IPO valuation. It was last valued at $5 billion after raising $340 million in August.

Currently headquartered in Singapore, Zepto is shifting its base to India to meet the requirements for listing on Indian stock exchanges. CEO Aadit Palicha mentioned that this process is expected to conclude in the coming months.

In the competitive quick commerce sector, Zepto, which competes with Blinkit, Swiggy Instamart, Tata’s BigBasket, and Flipkart Minutes, has attracted significant investor interest due to its strong performance and rapid growth over the past three years. Its gross merchandise value (GMV) has exceeded $1.2 billion and is expected to turn profitable on an EBITDA basis soon. Rivals like Swiggy Instamart and Blinkit have GMVs of $1 billion and $1.6 billion, respectively.

India's quick commerce market has grown to $5.5 billion in three years, driven by increased competition, according to Kotak Institutional Equities. Leading players are expanding by opening more dark stores and moving into smaller towns. The quick commerce industry is becoming more competitive with new players like Flipkart and BigBasket shifting to full quick commerce models. Zepto and Zomato, as established players, are scaling up their operations.

Blinkit plans to expand its dark stores to 1,000 by the end of FY25, while Zepto aims for 700 stores by the end of the current fiscal year. Swiggy Instamart is expanding into Tier II cities like Amritsar and Kanpur. Kotak Institutional Equities anticipates that competition will increase in the next year as players expand in overlapping areas, leading to more price wars and discounting. New entrants like BigBasket, Flipkart, and potentially Amazon could further intensify the competition.

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