Zepto may slash IPO valuation amid investor concerns
What's the story
Indian fast-delivery company Zepto Ltd. is looking to lower its initial public offering (IPO) valuation, amid concerns over cash burn and profitability, according to Bloomberg. Foreign investors are valuing the company at around $4.5 billion, while domestic institutional investors peg it between $3-3.5 billion. This marks a sharp decline from the $7 billion valuation achieved during a fundraising round last October.
Market response
Final valuation and issue size yet to be finalized
Zepto plans to raise up to $850 million through its IPO and is still in talks with potential investors.
The final valuation, issue size, and launch date are yet to be finalized.
In the unlisted market, Zepto shares trade at around ₹39 each, valuing the company at about ₹49,200 crore ($5.1 billion).
This represents a 33% decline from its March level.
IPO details
IPO details and use of proceeds
The IPO consists of a fresh issue of shares worth ₹8,010 crore ($831 million) and an offer for sale of 113 million shares by existing investors.
The proceeds from the primary issue will be used to expand Zepto's dark-store network, strengthen its tech infrastructure, and fund growth initiatives.
The company competes with Amazon's India business as well as local rivals Swiggy, Blinkit, and Tata Group BigBasket.