Zepto IPO: How it compares with Zomato-led Blinkit and Swiggy’s Instamart

India’s fast-growing quick commerce sector may see another public issue, with Zepto likely to move closer to an initial public offering (IPO), according to Zee Business sources.

The company is expected to file a confidential draft red herring prospectus (DRHP) soon. The proposed IPO size is estimated at around Rs 11,000 crore and is likely to include a mix of fresh issue and offer for sale.

Fund-raising activity intensifies in quick commerce

The development comes amid heightened competition and aggressive fund-raising activity in the quick commerce segment, which includes players such as Zomato-owned Blinkit, Swiggy’s Instamart and Zepto.

Over the past two months, leading companies in the sector have raised around Rs 13,760 crore through various fundraising routes. Swiggy raised close to Rs 10,000 crore through a qualified institutional placement (QIP), while Zepto raised about Rs 3,760 crore in October from a US pension fund.

Cash position, valuation and store expansion

Following these fundraising exercises, companies have seen changes in their cash positions and valuations. Zomato currently has a cash balance of about Rs 18,400 crore, with its valuation estimated at around Rs 2.7 lakh crore.

Swiggy’s cash balance stands at nearly Rs 17,000 crore, with a valuation of around Rs 1 lakh crore. Zepto’s cash balance is estimated at about Rs 7,900 crore, while its valuation is around Rs 62,930 crore.

Blinkit continues to be the market leader in the quick commerce space, supported by a growth-first strategy and rapid store expansion. However, Zepto is also expanding its presence. In terms of dark stores, Blinkit has around 1,816 stores, Instamart has about 1,102 stores, while Zepto operates between 750 and 1,000 dark stores.

Losses, Profitability and Market Share

Despite strong expansion, most companies in the segment continue to report losses due to high investment in infrastructure and expansion. Zepto has reported losses of around Rs 3,360 crore, while Swiggy’s losses are estimated at Rs 3,000 crore.

Zomato, however, reported a profit of Rs 527 crore. Blinkit has recently turned EBITDA-positive, while Instamart and Zepto remain loss-making at the EBITDA level.

In terms of market share, Blinkit holds about 49 per cent of the quick commerce market. Zepto and Instamart each have around 29 per cent market share.

Industry participants expect recent fundraising to be used largely for dark store expansion and strengthening delivery infrastructure. Market experts said the sector is witnessing rapid growth, driven by changing consumer buying habits and demand for faster delivery.

However, they added that investor interest in upcoming IPOs will depend largely on valuations at the time of issue.