Zepto, the ‘fastest’ grocery delivery company in India, is preparing to file a Draft Red Herring Prospectus (DHRP) for a $500 million Initial Public Offering (IPO) before the end of the year. Currently, the company is working with Axis Bank Ltd. Motilal Oswal Investment Advisors Ltd. and the local units of Morgan Stanley, Hong Kong and Shanghai Banking Corporation (HSBC) Holdings Plc, and Goldman Sachs Group Inc. to submit their DHRP via a confidential route.
The Zepto IPO is expected to include a new issue and secondary share sales by current investors, which are earmarked for expansion. Deliberations are continuing, and details, including the size and timings of the IPO, are subject to change. Representatives for Zepto, Goldman Sachs, and HSBC refused to comment, while other banks didn’t respond to requests for comments.
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India’s e-commerce sector is experiencing rapid growth, with startups planning to establish dense warehouse networks and delivery fleets to meet increased demand for groceries and household items. Zepto’s vision has immense support from numerous global investors, including SoftBank Group Corp. and Temasek Holidays Pte., which have invested billions in the sector, making it the world’s most closely watched experiment in rapid deliveries. The offered IPO follows Zepto’s $450 million fundraising in October, which valued the company at $7 billion.
Zepto Ltd. is set to compete with Amazon.com’s India unit and homegrown companies such as Swiggy Ltd., Zomato (Eternal Ltd.), and Tata Group’s Bigbasket.
