Zepto’s IPO Valuation Target Sinks to $3 Billion From $7 Billion

Zepto and its investors have opened talks on an initial public offering (IPO) valuation near $3 billion, less than half the $7 billion price tag it carried nine months ago. No final number has been set. People familiar with the matter told Moneycontrol that fresh bids are due this week, with both the valuation and the deal structure still being worked out.

The slide accelerated fast. On July 17, a separate investor group was pricing Zepto near $5.1 billion. Ten days later, the target on the table fell to about $3 billion (Rs 29,000 crore), a drop of more than 40% in barely a week and a half.

Investors and Zepto Open Talks on a $3 Billion Target

The revised, targeted pre-money valuation under discussion is about $2.5 billion (Rs 24,000 crore), Moneycontrol reported, citing four people familiar with the discussions who spoke on condition of anonymity. If the book gets built around those levels, one of the people said, the IPO would split into a primary issue of roughly Rs 5,000 crore alongside a smaller secondary component, a sharp reduction from the fresh issue of up to Rs 8,010 crore Zepto proposed in its updated prospectus filed with India’s securities regulator in June.

Talks between the firm and the investors have begun today and discussions are expected to continue this week. The bids have to come in, so no final call has been taken yet on the valuation or deal structure. This is work in progress.

One of the four people described the exchange to Moneycontrol, which first reported the discussions on July 27. Two other people confirmed the broad shape of the plan, and one called the fresh round of talks part of “soft checks,” saying Zepto, led by co-founder and chief executive Aadit Palicha, would firm up its plans once it saw how investors responded. Moneycontrol said it emailed Zepto for comment and had not received a reply by publication time.

From a $1.4 Billion Unicorn to a $7 Billion Bet

Zepto’s climb was fast, and its current slide is faster. The company, founded in 2021 by Palicha and co-founder Kaivalya Vohra, became one of India’s quickest-ever unicorns and has raised money across more than a dozen rounds since.

1. August 2023: Zepto raises $200 million, becoming India’s first new unicorn of the year at a $1.4 billion valuation.
2. June 2024: A $665 million round lifts the valuation to $3.6 billion, the largest funding round of the year for an Indian startup.
3. August 2024: A Series G round adds $340 million and pushes the valuation to $5 billion.
4. October 2025: A $450 million round led by the California Public Employees’ Retirement System (CalPERS) values Zepto at $7 billion, the first time the pension giant has led a direct startup investment in the sector.
5. April 2026: The Securities and Exchange Board of India (Sebi) clears Zepto’s IPO.
6. June 2026: Zepto files an updated draft red herring prospectus (DRHP) proposing a fresh issue of up to Rs 8,010 crore plus an offer for sale (OFS) of 113.47 million shares.
7. July 17, 2026: Norges Bank Investment Management, Norway’s sovereign wealth fund manager, and Motilal Oswal are reported keen on the IPO at a post-money valuation near $5.1 billion.
8. July 27, 2026: Talks shift to a post-money target of about $3 billion.

Each round priced Zepto higher than the last, until this month.

Revenue Doubled. So Did the Cost of Winning Orders.

The numbers behind the markdown talks sit in Zepto’s own filing. Revenue from operations rose to Rs 22,624 crore in the year ended March 2026, roughly double the Rs 11,110 crore booked the year before. Losses grew too.

• Revenue: Rs 22,624 crore in FY26, up from Rs 11,110 crore in FY25.
• Net loss: Rs 5,905 crore in FY26, up 26% year on year, among the largest losses posted by an Indian startup.
• Procurement costs: up 90% to Rs 18,199 crore, now 63% of total spending.
• Scale: more than 1,139 dark stores and over 1.75 million orders a day as of March 2026.

Zepto also booked Rs 505 crore in interest and other non-operating income, pushing total income to Rs 23,128 crore. Domestic investment bank DAM Capital wrote that Zepto’s path to better margins depends on pushing more orders through each dark store and tightening unit economics, and called the IPO essential to funding the company’s next growth phase.

Who’s Selling Into the Markdown

CalPERS was not investing alone. The October 2025 round included Avenir, Avra, Lightspeed Venture Partners, Glade Brook Capital, StepStone Group and Nexus Venture Partners alongside the pension fund’s $450 million commitment. If the IPO now prices near $3 billion, that stake is worth less than half of what CalPERS paid for it nine months ago, at least on paper.

A separate group of existing investors is lined up to sell shares outright through the offer for sale in Zepto’s DRHP:

• Nexus Ventures VI Holdings, LLC
• Nexus Ventures VII Holdings, LLC
• Contrary ZEP Holdings, LLC
• Razor Ventures Zepto LLC
• Kaiser Foundation Hospitals
• Kaiser Permanente Group Trust

Together, those investors are offloading up to 113.47 million shares. Kaiser Foundation Hospitals and Kaiser Permanente Group Trust, arms of the U.S. healthcare nonprofit’s investment operation, appear in the seller list next to venture firms Nexus, Contrary and Razor, another sign of how far Zepto’s cap table reaches into American institutional money.

Founders Face an Enforcement Directorate Summons

Zepto’s filing carries another complication. Founders Aadit Palicha and Kaivalya Vohra received summons from India’s Enforcement Directorate (ED) in April 2026, according to disclosures in the company’s DRHP.

Zepto has not said publicly how the inquiry was resolved, if at all. Sebi cleared the IPO in April regardless, and the summons remained part of the public record when the company filed its updated prospectus two months later.

Why Is Quick Commerce Suddenly Out of Favor?

Amazon and Walmart-backed Flipkart have both pushed hard into 10-minute delivery this year, intensifying competition for dark-store real estate and delivery riders across India’s biggest cities. The scramble has already cost Zepto’s listed rivals dearly and left investors pricing quick commerce as a costlier, less certain bet than it looked in October.

Amazon’s and Flipkart’s expansion into the category has wiped out roughly $15 billion in combined market value from listed rivals Swiggy and Eternal, Blinkit’s parent, market trackers estimate. Eternal and Swiggy already trade on Indian exchanges, giving investors a daily read on how the market prices quick commerce. Zepto, still private, has no such reference point until it lists.

India’s quick-commerce market keeps expanding regardless of who owns it. Industry researcher Mordor Intelligence estimates the category was worth about $3.65 billion in 2026, with growth expected to reach $6.64 billion by 2031. Research firm Redseer has described the industry entering a new normal built on scale and margin discipline, replacing the aggressive discounting that funded Zepto’s earlier rounds.

India’s primary market has stayed busy through 2026. Asset manager SBI Funds Management pulled in $31 billion in IPO bids weeks earlier, and hospital operator Manipal Health led the country’s busiest IPO week of 2026. Profitable, asset-backed businesses are still finding strong demand. A loss-making delivery app chasing its fourth valuation in ten months is a tougher sell.

The Book Still Has to Be Built

Nothing is final. The four people who described the talks to Moneycontrol were consistent on that point: bids need to come in before Zepto and its investors settle on a number, and the process could still move before the week is out. Zepto’s book-running lead managers, Axis Capital, Morgan Stanley India, Goldman Sachs (India) Securities, Motilal Oswal Investment Advisors, HSBC Securities and Capital Markets (India), JM Financial and IIFL Capital Services, are running that process.

Reliance Industries offers a reminder of how much bigger this year’s IPO calendar could get. Its telecom arm, whose Jio Platforms listing is drawing closer, would dwarf Zepto’s offering many times over. Against that backdrop, a $3 billion quick-commerce IPO is a modest deal that still has to prove a young, loss-making company can trade like a public one.

For now, Zepto’s price is whatever the next few days of bidding decide. Nine months ago, CalPERS paid for a $7 billion company. The number on the table this week is $3 billion.

Frequently Asked Questions

What Is the Difference Between Pre-Money and Post-Money Valuation?

Pre-money valuation is what a company is judged to be worth before new investment comes in; post-money is that figure plus the fresh capital raised. In Zepto’s case, the revised talks value the company at about $2.5 billion pre-money, and add the roughly Rs 5,000 crore primary raise to reach the $3 billion post-money figure investors are now discussing.

Who Are Zepto’s Biggest Backers Ahead of the IPO?

Beyond the investors selling shares in the offer for sale, Zepto’s cap table includes CalPERS, Nexus Venture Partners, Lightspeed Venture Partners, General Catalyst, Glade Brook Capital, StepStone Group, Avenir and Avra, most of whom joined across the 2024 and 2025 funding rounds that pushed Zepto’s valuation from $3.6 billion to $7 billion.

When Will Zepto’s IPO List?

No listing date has been confirmed. Sebi approved the offering in April 2026, and Zepto’s bankers are still building the order book as of late July, with the company expected to firm up pricing once it sees investor demand. Earlier reporting had pointed to a possible listing within 2026, but the valuation talks suggest the timeline is still moving.

How Big Is India’s Quick-Commerce Market?

India’s quick-commerce sector is expected to serve more than 50 million monthly shoppers across over 250 cities by the end of the year, according to industry estimates, up sharply from a much smaller base two years ago. Order volumes across the category grew nearly 100% year on year in early 2026, even before Amazon and Flipkart’s expansion added new competition.