Zepto Limited — UDRHP-I Summary

Founding & corporate history

Key facts

Subsidiaries (FY26 snapshot)

Lead managers, exchanges & advisors

Eight BRLMs — large QIB-targeted syndicate reflects intended global anchor demand.

Listing: BSE & NSE (in-principle approvals dated 3 February 2026). Registrar: KFin Technologies Limited. Independent Chartered Accountant: Manian & Rao.

Five revenue lines on a single platform

Supply chain stack

Technology stack

• WMS & OMS: in-house warehouse + order management systems
• Workforce mgmt platform (WMP): shift, rider routing, productivity
• Demand forecasting: ML models for FMCG and fresh categories
• Customer data platform & cohorting engine: personalisation, journey orchestration
• Brand insights: Zepto Atom (launched May 2025) — analytics portal for Brand Partners
• Generative AI: Zepto GPT (NLP), ZAP (support chat), One Support (CRM ticketing)
• Automation hardware: Put-to-Light sorting stations, linear sorters, automated weighing & packaging

Private-label brands (“Zepto Brands”)

Disclosed as nascent but with significant scale-up potential. Revenue % not separately disclosed.

ESG & sustainability initiatives (disclosed)

• Transitioning last-mile fleet to EVs (sector avg 25–40% of orders on EV per Redseer)
• Reusable or paper packaging with opt-out option
• Solar installations across select dark stores & warehouses
• “Pink Stores”: 3 fully women-operated dark stores
• Integration of persons with disabilities across Zepto Cafes

Densification flywheel — illustrative cluster build-out

Headline KPIs — FY24 to FY26

*Q4 FY26 NRV implied from disclosed quarterly metrics. Read-across: Loss per order halved between FY25 and Q4 FY26 (₹136 → ₹59). NRV is “Net Receivables Value”, a Zepto-specific measure analogous to GMV net of returns & cancellations.

Cost per order — build-up

Read-across. The dominant unlock has been digital marketing efficiency (down from ₹33.75/order in FY25 to ₹1.01/order in Q4 FY26) and fixed cost absorption (₹80 → ₹52). Variable supply-chain cost has been roughly flat — the leverage story is overhead absorption, not unit cost reduction. The Redseer report notes per-unit last-mile cost in Q-commerce runs at 5–6% of AOV vs. 9–10% in food delivery, structurally lower.

Peer comparison — Q4 FY26 (Zepto vs Swiggy Instamart vs Blinkit/Eternal)

Source: Basis for Offer Price section, UDRHP-I. Blinkit segment-level EBITDA & revenue not separately disclosed at the segment level for FY26 in directly comparable form.

Read-across. Zepto operates a smaller absolute footprint than Blinkit (1,139 vs 2,243 dark stores) but matches its orders-per-day per store almost 2x Instamart’s. Per-order loss is ₹17 lower than Instamart, suggesting better contribution economics or richer ad-monetisation at the same volume tier. Blinkit/Eternal segment EBITDA is the binding peer comparison institutional investors will benchmark against.

Indian quick-commerce GMV — CY2022 to CY2030

Key Redseer claims

• CY22 GMV: ₹133 bn (~US$1.6 bn)
• CY25 GMV: ₹963 bn (~US$11.3 bn)
• CY30 GMV: ₹5.1–7.1 trn (US$60–83 bn)
• CY22–25 CAGR ~95%; CY25–30 5–7× growth
• Q-com share of online retail: 3% (CY22) → 13% (CY25) → 26–30% (CY30)
• Q-com to capture 9–11% of incremental Indian retail growth CY25–30
• India online grocery penetration only 1.7–2.0% (CY25) vs ~12% US, ~7% China

Category mix evolution — CY24 vs CY25 vs CY30E

Tier-1 vs Tier-2/3 share of Q-com GMV

Indian retail context — how Q-commerce fits in

Q-commerce vs other channels — structural advantages

• GMV per sq ft: ₹50,000–70,000 per sq ft p.a. at dark stores vs ~₹25,000 at organised offline stores (~2–3×)
• Last-mile cost-to-AOV: 5–6% for Q-com vs 9–10% for food delivery
• Channel evolution: Traditional store → Organised offline → Online (5–7 days) → Slotted (same/next day) → Q-com (10–20 min)
• Indian grocery: Still 90–95% unorganised — massive headroom
• Frequency lock-in: Dairy 6–7×/week, F&V 5–6×/week, FMCG 1–2×/week, staples 0.5–1×/week

Scaled-player dark store count — Q4 FY26

Zepto-specific Redseer findings

Our strengths (verbatim section headers)

• Densification flywheel — that lowers delivery costs, deepens the user value proposition, and ultimately drives more order volume.
• Data flywheel — that enhances user experience by leveraging data and personalisation to drive stronger product assortment and availability leading to order volume growth.
• Focus on operational excellence — to drive cost improvements (sub-pillars: Dark Store Efficiency, Last Mile Excellence, Automation).
• Technology-native culture — personalised user journey & engagement, supply chain intelligence (WMS/OMS), workforce management platform, last-mile delivery platform, brand insights & advertising engine, finance.
• Order-volume scaling driving cost-per-order reduction — visible improvements in unit economics as volume scales.
• Founder-led company — supported by an experienced and professional management team.

Growth strategies (verbatim section headers)

• Continue to grow order volume, user base, NRV — while optimising Cost per Order. Sub-levers: densification, maximising order volume per dark store, automation.
• “Everyday Low Prices” platform philosophy — with profitability improvement driven by cost excellence.
• Margin-expansion opportunities neutral or accretive to users — advertisement revenue, new product categories, private label.
• Scaling fresh fruits and vegetables — to drive user stickiness and frequency. (Vertically integrated F&V supply chain across collection centres — Mahabaleshwar to Mandya.)
• Continued investments in technology — AI-optimised inbound & picking, robotic automation, conversational commerce engine, agentic AI software development lifecycle platform.

Cohort retention & basket expansion — the demonstrated thesis

Consolidated income statement — FY24 to FY26

Read-across. Revenue more than doubled (+104%); expense growth was slower (+79%) — the operating leverage is real. Adj. EBITDA margin improved 1,527 bps (-35.6% → -20.3% of NRV). Losses still grew in absolute ₹ terms (driven by D&A doubling as new dark stores capitalised), but the per-order metric is the meaningful one and has halved.

Revenue & EBITDA — trajectory

Expense composition — FY26

Balance sheet snapshot — FY24 to FY26

Closing cash + investments + other bank balances = ₹47,703 mn at FY26 end (vs ₹49,408 mn FY25 end). The IPO fresh issue is ₹80,100 mn cap; cash buffer + IPO would extend runway materially.

Cash flow summary

Read-across. Operating burn improved by ₹11,624 mn YoY despite revenue more than doubling — the working capital absorption that consumed cash in FY25 has reversed. The FY25 financing inflow of ₹107.8 bn reflects the equity round backing the scheme of arrangement; FY26 financing of ₹18.9 bn is more modest as the company approaches IPO funding.

Auditor matters worth flagging

• FY24: Auditor qualification under Section 143(3)(i) on IT general controls — “Holding Company did not have appropriate information technology general controls with respect to manage access, manage change and manage operations process which could potentially result in material misstatement in the financial statements.” Investors should note this.
• FY25 & FY26: Modifications relate to the audit-trail (edit-log) feature enablement on one accounting software and one support software application. No restated adjustment required.
• Industry P/E: 635.05x (single comparable computed on May 25, 2026 closing prices vs FY26 diluted EPS) — reflects the loss-making peer set.

Share count progression

Shareholding pattern (pre-Offer, no conversion)

Shareholders ≥ 1% on fully-diluted basis

Offer-for-Sale tranches by selling shareholder

WACA = weighted-average cost of acquisition per share. Nexus VI’s ₹3.91 vs Nexus VII’s ₹23.65 reflects the staged investment cost basis across funds. Weighted-avg cost of all primary issuances to date: ₹37.74 per share.

ESOP 2025

Key KMP grants (cumulative): R. Bafna 190.3 mn, V. Dhanani 80.5 mn, N. Mittal 75.3 mn, D. Meel 70.5 mn.

Five board-approved Objects

Caps: Inorganic + GCP combined ≤35% of Gross Proceeds; GCP alone ≤25%; inorganic alone ≤10%.

Use of proceeds — split

Year-wise deployment schedule (₹ mn)

Dark-store expansion plan — Object #1 detail

• New stores planned: ~1,904 dark stores aggregating 6.66–7.62 mn sq ft
• Average store size: 3,500–4,000 sq ft
• New cities targeted: Guwahati, Patna, Ranchi (and others)
• Capex per store: ₹7.94 mn (FY27) escalating to ₹9.06 mn (FY30) on 4.5% inflation assumption
• Architect: Architects IN
• Status at FY26-end: 1,139 dark stores (FY24: 337; FY25: 1,029). FY26 opened 169, closed 59, relocated 46.

Headline risks — what investors must underwrite

• History of losses and negative operating cash flows. Restated losses of ₹59,051.92 mn (FY26), ₹46,997.14 mn (FY25), ₹12,147.94 mn (FY24). Negative cash from operations every year since inception.
• User acquisition cost-effectiveness. Retaining and acquiring users is critical; failure to do so cost-effectively may adversely affect the business.
• Brand and Merchant Partner dependence. Growth depends on acquiring/retaining Brand Partners, Merchant Partners and the Farmer Partner Network — affects assortment, advertising revenue.
• Delivery Partner availability. Reliance on the gig-economy delivery fleet; failure to retain riders affects fulfilment.
• Dark-store dependency. Heavy capex commitment; locations for ₹16,290 mn of new stores not yet identified.
• Intense competition. Across Q-commerce (Blinkit/Eternal, Swiggy Instamart, BigBasket Now, Tata Neu) plus e-grocery and modern trade.
• Limited operating history. Business commenced July 2021; limited experience in newer offerings (Café, pharmacy, marketplace).
• IT systems uptime. Uninterrupted technology functioning is essential; outages directly affect orders.
• Future capital needs. May require additional capital to fund growth; terms may not be acceptable.
• Quarterly information assurance level. Some quarterly periods examined under limited-assurance review only, not full audit.
• “Zepto” brand protection. 18 trademarks registered, 104 pending in India, 18 objected, 36 opposed. IP risk is material.
• Negative publicity / reputational. Quality complaints, food-safety incidents, regulator actions can damage brand.
• Quality, quantity, weight control at dark stores. Failures by Merchant/Brand Partners can attract consumer-protection action.
• Property locations not yet identified. A portion of net proceeds will be deployed without specific property tie-ups in place at the time of filing.
• Financing covenant compliance. Inability to comply with repayment and other covenants could constrain cash flows.

Regulatory / governance risks worth noting

• ED summons (April 2026): Enforcement Directorate issued summons to both promoters Aadit Palicha and Kaivalya Vohra on 8 April 2026 in connection with an investigation; both founders appeared.
• CCI matter (May 2026): All India Consumer Products Distributors Federation filed information against multiple Q-com platforms including ZMPL. CCI sought additional details from ZMPL within four weeks; no formal investigation initiated as at UDRHP-I date.
• Minimum Wages Act criminal complaint: Pending before JMFC Hosakote against Kaivalya Vohra and the Company under Sections 22 and 22(A).
• FY24 IFC qualification: Auditor flagged material weakness in IT general controls (access management, change management, operations).
• DPDP Act: Notified 13 November 2025 — ongoing compliance posture.
• Proposed E-Commerce Rules: “Fall-back liability” concept and flash-sale restrictions under discussion.
• EV mandate (Delhi): Delhi MV Aggregator & Delivery Service Scheme 2023 mandates 100% 2W/3W EV by 2030, with 10%/5% within 6 months of notification.

Operating / commercial risks

• Contract manufacturers / private-label suppliers: Reliance on third parties for “Daily Good”, “Bay6”, “Jai Kashi” and Zepto Café inputs.
• Seasonality: Order volume varies by season and festival cycle.
• Leased estate: All 1,139 dark stores + 75 warehouses + both offices are leased — renewal risk concentrated.
• OFS — no proceeds: Company does not receive any cash from the OFS portion; only fresh-issue proceeds flow to the business.
• Redseer Report reliance: Industry data is commissioned; not independent.
• Post-listing surveillance: Stock may be placed under ASM/GSM frameworks limiting liquidity.

Contingent liabilities & litigation summary

• Pending litigations (contingent): ₹20.10 mn as at 31 March 2026 (Ind AS 37 disclosure)
• Detailed Outstanding Litigation tables (material cases, tax disputes, regulatory matters) begin at page 580 of the prospectus and are not extracted in this summary.

Board of Directors (6)

Read-across. Three executive directors (founders + CFO), one nominee director (Glade Brook), two independent directors. The CFO out-earns both founders, reflecting professional-market CFO compensation. Both founders are 23 years old — institutional investors should weigh founder-led growth velocity against limited operating history beyond Q-commerce.

Board committees

Senior Management Personnel

Promoters & promoter group

Primary sources

• Issuer prospectus: Zepto Limited — Updated Draft Red Herring Prospectus – I (UDRHP-I), dated 8 June 2026, 690 pages. Filed under SEBI ICDR Regulations, Regulation 6(2).
• Industry data: Redseer Strategy Consultants report, engagement letter dated 8 November 2024 (addendum 28 November 2025), consent letter 30 May 2026.
• Audit: Restated consolidated financial information audited by the Company’s statutory auditors; Independent Chartered Accountant — Manian & Rao.
• Corporate identity: CIN U46909MH2020PLC351339; Registered Office — Hiranandani Lighthall, A Wing, 6th floor, Saki Vihar Road, Andheri East, Mumbai 400 072.

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