Under the Securities and Exchange Board of India regulations, companies preparing for an IPO can raise up to 20 per cent of their proposed fresh issue through a pre-IPO placement
Quick commerce firm Zepto has put its initial public offering (IPO) plans on hold for now and has instead begun work on raising more than ₹1,000 crore (about $105 million) through a pre-IPO placement, according to people familiar with the matter.The funding round is expected to see participation primarily from existing investors, with domestic institutional investors likely to lead the round, sources said.Strategy resetThe move comes as the company recalibrates its public market strategy after facing a significant gap between its internal valuation expectations and those of prospective public market investors. Earlier this month, businessline reported that Zepto had slashed its proposed IPO size by nearly half from the originally planned ₹5,000 crore as it reassessed market conditions.“Zepto is expected to raise the capital at a valuation of around $4-4.2 billion,” a person close to the development said. While the valuation remains well below the company’s last private valuation of $7 billion, it is higher than the $2.5-3 billion valuation range that some domestic mutual funds had indicated during preliminary IPO discussions.Under the Securities and Exchange Board of India (SEBI) regulations, companies preparing for an IPO can raise up to 20 per cent of their proposed fresh issue through a pre-IPO placement. However, any amount raised through this route must be deducted from the fresh issue component of the IPO, effectively reducing the size of the public issue by the amount raised before listing.Sources said Zepto remains committed to listing but is choosing to defer the offering until it can demonstrate stronger financial performance. The company expects that an improved profitability profile over the next few quarters could help it command a better valuation in the public markets.The delay comes amid heightened scrutiny of quick commerce business models, with investors increasingly prioritising profitability alongside growth. While the sector continues to attract capital, public market investors have become more cautious about richly valued, cash-burning companies.Zepto, which competes with Blinkit, Swiggy Instamart and Flipkart Minutes, had confidentially filed its draft IPO papers earlier this year. The company is now expected to revisit its listing plans in the coming months after completing the pre-IPO fundraising and further improving its financial metrics.Published on July 30, 2026
