Zepto IPO: how the business works

Wholesalers and retailers buy goods from Zepto, sellers on its app pay for storage and delivery, and brands pay for ads; its costs are still higher than that income, so it makes a loss.

• 01In FY26, 77.7% of Zepto's revenue came from selling goods to wholesalers and retailers (its procurement and distribution business); ads from brands brought in 7.2%.
• 02Of every ₹100 that came in during FY26, Zepto spent ₹125.5, a loss of ₹25.5.

Fresh issue (new shares)

₹8,010 cr

Offer for sale (existing shares)

11.35 crore shares

To list on

NSE and BSE

• 01Fresh issue: Zepto creates new shares worth up to ₹8,010 crore, and that money goes to the company. It may be cut by up to ₹1,602 crore if Zepto raises money in a pre-IPO placement first.
• 02Offer for sale: two Nexus Ventures funds, Razor Ventures, Contrary and two Kaiser Permanente entities sell 11.35 crore shares they already own. That money goes to them, not to Zepto.
• 03The promoters (founders Aadit Palicha and Kaivalya Vohra, their family trusts and relatives) are not selling any shares in the offer.
• 04Zepto does not meet SEBI's profit-history test for an IPO. So at least 75% of the offer is kept for large institutions, up to 15% for non-institutional investors and up to 10% for retail investors.
• 05The UDRHP-I has no price band, lot size or offer dates. These are set in the red herring prospectus (RHP), which had not been filed when this page was written.

What a DRHP, RHP and prospectus are, and fresh issue vs offer for sale

Lead managers

Axis Capital Ltd, Morgan Stanley India Company Pvt Ltd, Goldman Sachs (India) Securities Pvt Ltd, Motilal Oswal Investment Advisors Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, JM Financial Ltd, IIFL Capital Services Ltd

Registrar

KFin Technologies Ltd

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Open about 1,904 new dark stores between FY27 and FY30The UDRHP-I says the store locations are not yet identified.₹1,629 cr
• Pay rent on existing dark storesSpread over FY27 to FY30.₹1,735 cr
• Technology and cloud infrastructureSpread over FY27 to FY30.₹1,325 cr
• Marketing, through the subsidiary Zepto MarketplaceSpread over FY27 to FY30.₹520 cr
• Unidentified acquisitions and general corporate purposesAmount not yet stated in the UDRHP-I. Capped at 35% of the money raised: up to 25% for general corporate purposes and up to 10% for acquisitions.Amount not fixed

The rest, up to 35% of the money raised, is for general corporate purposes and unidentified acquisitions; the UDRHP-I does not yet give the amount. ₹1,735 crore pays rent and ₹520 crore pays for marketing, which are running costs rather than new assets.

Only the fresh issue raises money for the company; money from the offer for sale goes to the sellers.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Quick-delivery app

  Shoppers order from about 46,600 items on average per store area (FY26). The average delivery trip was 1.78 km in FY26.

• Services for sellers

  Third-party sellers list their goods on the app. Zepto charges them for storing goods in its dark stores, packing and last-mile delivery, plus a platform commission.

• Advertising for brands

  Brands pay to promote their products inside the app; 2,468 brands used ads in FY26. Zepto Atom, launched in May 2025, gives brands sales data.

• Zepto Café

  Kitchens inside dark stores that make food and drinks for delivery.

• Own brands

  Private-label products sold under names such as Daily Good, Bay6 and Jai Kashi.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Wholesalers and retailers (buying goods)

  78%

  of revenue

  Wholesalers and retailers buy goods from Zepto, on a non-exclusive basis, as part of its procurement and distribution business: ₹17,588 crore in FY26.

• Sellers on the app (storage and delivery)

  12%

  of revenue

  Fees for warehousing, packing and last-mile delivery: ₹2,780 crore in FY26.

• Brands (advertising)

  7%

  of revenue

  Brands pay to promote products in the app: ₹1,636 crore in FY26, up from ₹49 crore in FY24.

• Sellers on the app (platform commission)

  3%

  of revenue

  Platform service fees: ₹564 crore in FY26.

• Shoppers, franchisees and others

  0%

  of revenue

  Shopper subscription fees (₹28 crore), franchise fees (₹15 crore) and scrap sales (₹13 crore) in FY26.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

1. 1Wholesalers, retailers, sellers and brands paid Zepto ₹22,624 crore in FY26; income on its deposits and investments, and other items, added ₹505 crore of other income.
2. 2Zepto spent ₹18,198 crore buying the goods it sells to wholesalers and retailers.
3. 3Delivery and handling cost ₹3,046 crore, staff ₹1,785 crore and other costs, including ads, ₹4,845 crore.
4. 4Wear and tear on stores and equipment (₹894 crore) and interest, mostly on leases (₹265 crore), came on top.
5. 5Costs were ₹5,905 crore more than the money that came in, so Zepto paid no tax and made a loss.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

Each line = amount ÷ total money in × 100. Lines may not add to exactly ₹100 because of rounding.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Dark stores

  1,139 rented dark stores at 31 Mar 2026, up from 337 two years earlier. Zepto opened 169 and closed 59 in FY26.

• Delivery partners

  About 2.2 lakh active delivery partners on average in FY26, rising to about 2.9 lakh in Q4 FY26. Zepto's UDRHP-I lists keeping them as a risk.

• Sellers and brands

  The goods on the app come from brands and sellers who can also work with rival apps, per the UDRHP-I.

• People

  5,212 employees plus 48,011 operating staff at the end of FY26. Attrition was 51.3% for employees and 73.2% for operating staff in FY26.

• Investor money

  Losses have been funded by share sales to investors. Zepto held ₹4,770 crore in cash and short-term investments at 31 Mar 2026.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Blinkit (part of Eternal Ltd)

  Runs the same kind of dark-store delivery app. It had 2,243 stores at the end of FY26, per a Redseer report commissioned by Zepto (peer figures from Eternal's filings).

• Swiggy Instamart (part of Swiggy Ltd)

  A quick-commerce division of Swiggy with 1,143 stores at the end of FY26, per a Redseer report commissioned by Zepto (peer figures from Swiggy's filings).

• Amazon Now

  Named as a newer quick-delivery entrant in a Redseer report commissioned by Zepto.

• Flipkart Minutes

  Named as a newer quick-delivery entrant in a Redseer report commissioned by Zepto.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• More dark stores

  Early

  1,139 stores at 31 Mar 2026

  Zepto says in its UDRHP-I that it plans about 1,904 new dark stores from FY27 to FY30, including in Guwahati, Patna and Ranchi, using ₹1,629 crore of the IPO money.

  Status: Early, too early to judge.

• Advertising income

  Working

  ₹1,636 crore in FY26 (7.2% of revenue)

  Ad revenue rose from ₹49 crore in FY24 to ₹651 crore in FY25 and ₹1,636 crore in FY26.

  Status: Working, on track against what the company said.

• Lower cost per order

  Working

  ₹127.79 per order in Q4 FY26

  Zepto's company-defined total cost per order fell from ₹185.11 in FY25 to ₹150.71 in FY26 and ₹127.79 in Q4 FY26.

  Status: Working, on track against what the company said.

Status compares progress with what the company itself said it would do: Working = on track against what the company said; Mixed = partly on track; Behind = behind the company's own plan; New = recently announced; Early = too early to judge.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

EBITDA = profit before interest, tax and wear-and-tear of assets. Financial year runs April to March (March year end). Net profit is the share belonging to the company's owners.

• Lease liabilities for its rented dark stores, warehouses and offices were ₹2,710 crore at 31 Mar 2026; they are not counted as debt here.
• Total equity fell from ₹8,586 crore at 31 Mar 2025 to ₹5,998 crore at 31 Mar 2026, mainly because of the FY26 loss.
• Net worth as defined in the offer document (SEBI's definition, which leaves out some reserves) was ₹3,560 crore at 31 Mar 2026.
• Zepto's own 'closing cash including investments' figure was ₹5,681 crore, because it also counts longer bank deposits.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

The promoter group's share falls after the IPO when new shares are added or promoters sell. The offer document shows the expected holding after the offer.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Aadit Palicha

  Managing Director and CEO · since 2025

  Co-founder and promoter; a director since 4 Feb 2025. FY26 pay ₹2.7 crore.

• Kaivalya Vohra

  Whole-time Director; President, Technology and Product · since 2021

  Co-founder and promoter. FY26 pay ₹2.6 crore.

• Ramesh Bafna

  Whole-time Director and CFO · since 2023

  Former CFO of Myntra; earlier at Flipkart and Wipro. FY26 pay ₹3.9 crore.

• Paul Hudson

  Chairman (non-executive, nominee of Glade Brook) · since 2025

• Akhil Gupta

  Independent Director

• Anulakshmi Hariharan

  Independent Director

• Vikas Sharma

  Chief Operating Officer

  Senior management.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

Auditor

S.R. Batliboi & Associates LLP

Auditor changes

None in the period covered

Audit qualifications

FY24: The auditor qualified its report on internal financial controls over IT general controls, per the UDRHP-I.; FY24–FY26: The auditor's reports note gaps in the audit trail (edit log) of the accounting software, per the UDRHP-I.

Related-party dealings

Related-party dealings with outsiders are small, per the UDRHP-I: mainly pay to key managers, plus rent and licence fees of up to ₹0.4 crore a year in FY24–FY25 that have since ended. Larger flows, such as ₹2,000 crore of equity put into Zepto Marketplace in FY26, are inside the group and cancel out in the consolidated accounts.

Credit rating

No public credit rating found

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• The app (platform) business moved to the subsidiary Zepto Marketplace Pvt Ltd on 13 Jan 2025. Zepto Ltd keeps the Zepto brand and licenses it to that subsidiary.
• Kiranakart Wholesale Pvt Ltd trades fruit and vegetables. Zepto lent it ₹842 crore during FY26 and was repaid ₹851 crore.
• Zepto put ₹2,000 crore of equity into Zepto Marketplace in FY26.
• All three subsidiaries are loss-making, per the UDRHP-I; Zepto Commerce Pvt Ltd had not started operating.
• Rent and licence fees of up to ₹0.4 crore were paid to an LLP and to promoter Jaideep Vohra in FY24–FY25; these arrangements have ended.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

Cases are listed as the offer document describes them. A pending case is an allegation until a court or regulator decides it.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Cash and liquidity

  Losses and cash burn

  Zepto lost ₹5,905 crore in FY26 and used ₹3,462 crore of cash in its operations. Its UDRHP-I says it has made losses since it started.

  Watch Loss and operating cash flow in the next offer document.

• Competition

  Competition from larger groups

  Blinkit (Eternal), Swiggy Instamart, Amazon Now and Flipkart Minutes run similar services, and the UDRHP-I says switching costs for shoppers are low.

  Watch Orders per day and orders per store.

• Concentration

  Few large customers

  Five unnamed customers each brought in more than 10% of FY26 revenue, together the majority of it.

  Watch The number of customers above 10% of revenue in the next filing.

• Execution

  Delivery partners and staff

  Deliveries depend on about 2.2 lakh gig delivery partners (FY26 average), and operating-staff attrition was 73.2% in FY26.

  Watch Active delivery partners and attrition.

• Execution

  Rented dark stores

  Zepto's stores are rented, with ₹2,710 crore of lease liabilities at 31 Mar 2026, and it closed 59 stores in FY26.

  Watch Store openings, closures and lease liabilities.

• Regulation

  Food-safety and consumer rules

  13 of the 21 regulatory matters against Zepto are food-safety cases, and a subsidiary faces consumer-regulator action over alleged dark patterns.

  Watch New regulatory matters in the next offer document.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

• Part of the money goes to selling investors

  Money from the 11.35 crore shares in the offer for sale goes to the six selling investors, not to Zepto.

• New store sites not yet chosen

  ₹1,629 crore of the fresh issue is for about 1,904 new dark stores, but the UDRHP-I says their locations are not yet identified.

• Some IPO money pays running costs

  ₹1,735 crore is for rent on existing stores and ₹520 crore for marketing, costs that recur every year.

• Quarterly numbers checked by other accountants

  The UDRHP-I says some quarterly figures were examined by accountants who were not Zepto's statutory auditors for those periods.

• Industry figures come from a paid report

  Market size and Zepto's ranking come from a Redseer report commissioned and paid for by Zepto for the IPO.

• Offer size and terms can still change

  The fresh issue may shrink by up to ₹1,602 crore after a pre-IPO placement, and the price band and dates come only with the RHP.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026; Zepto To Now Re-Attempt IPO By May 2027: Report

What does Zepto do?

Zepto (Zepto Limited, formerly Kiranakart Technologies) runs a quick-commerce app in India: shoppers order groceries and household items, which are packed at nearby dark stores and delivered by delivery partners. Zepto ran 1,139 dark stores at 31 Mar 2026, per its UDRHP-I dated 8 Jun 2026.

How does Zepto make money?

Zepto earned 77.7% of its FY26 revenue of ₹22,624 crore by selling goods to wholesalers and retailers (its procurement and distribution business). Most of the rest came from warehousing, packing and delivery fees (12.3%), advertising by brands (7.2%) and platform commissions (2.5%).

Who are Zepto's customers?

Zepto's paying customers are mainly wholesalers and retailers that buy goods from it, sellers on its app that pay service fees, and brands that advertise. In FY26, five customers each accounted for more than 10% of Zepto's revenue and together made up the majority, per its UDRHP-I; it does not name them.

How big is Zepto?

Zepto reported restated revenue from operations of ₹22,624 crore in FY26 (year to 31 Mar 2026), up from ₹11,110 crore in FY25, and delivered 640 million orders in FY26, per its UDRHP-I.

Is Zepto profitable?

No. Zepto reported restated losses of ₹1,215 crore in FY24, ₹4,700 crore in FY25 and ₹5,905 crore in FY26, and its UDRHP-I says it has made losses and had negative operating cash flow since it started.

Who owns Zepto before the IPO?

Before the IPO, Zepto's promoters and promoter group (founders Aadit Palicha and Kaivalya Vohra, their family trusts and relatives) owned 19.56% on a fully diluted basis, per the UDRHP-I dated 8 Jun 2026. Investors such as Nexus Ventures (13.12%), Glade Brook (7.73%) and StepStone (7.34%), and an employee stock option trust (7.46%), held most of the rest.

What is the Zepto IPO?

The Zepto IPO, per its UDRHP-I dated 8 Jun 2026, is a fresh issue of new shares worth up to ₹8,010 crore plus an offer for sale of 11.35 crore existing shares by six investors, with a proposed listing on NSE and BSE. The UDRHP-I gives no price band or dates.

Does Zepto have debt?

Zepto had no borrowings at 31 Mar 2026 and held ₹4,770 crore in cash, bank deposits and short-term investments, per its UDRHP-I. It also had ₹2,710 crore of lease liabilities for its rented dark stores, warehouses and offices.

Source: Zepto Limited - Updated Draft Red Herring Prospectus I (UDRHP-I), dated 8 Jun 2026

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