Restaurant India News: Zepto IPO Plans Highlight Profitability Shift in Quick Commerce

Zepto has started engaging institutional investors ahead of its planned June–July IPO, as the company looks to raise capital while navigating rising competition in the rapid delivery segment. The development is being closely tracked by stakeholders in the food and grocery supply ecosystem, where quick commerce platforms play a growing role in demand generation.

According to people familiar with the matter, the Bengaluru-based firm has initiated pre-IPO roadshows, positioning its growth and profitability roadmap to potential investors. The company is targeting full-year post-tax profitability by FY2028-29, while continuing to scale operations at a reported 25–30 percent quarter-on-quarter growth rate.

As part of its financial recalibration, Zepto has reduced its quarterly cash burn to Rs 850-900 crore in the January-March period, compared to approximately Rs 1,200-1,300 crore in earlier quarters. The reduction has been driven by lower per-order costs and a slowdown in network expansion, with its dark store count remaining stable at around 1,100.

For the quarter ended March 2026, Zepto reported an Ebitda loss of around Rs 55-60 crore, an improvement from roughly Rs 100-110 crore in the July-September period, indicating tighter cost control and improved operational efficiency.

The company has confidentially filed draft papers for an IPO sized between Rs 11,000–12,000 crore, primarily through a fresh issue of shares. Final valuation and pricing are yet to be determined, pending regulatory approval from Sebi.

Zepto’s strategy mirrors a broader shift across the quick commerce sector, where companies are moving away from aggressive expansion towards sustainable unit economics. Competitors such as Blinkit and Swiggy’s Instamart have also signalled a similar approach. Blinkit reported breakeven at an adjusted Ebitda level in the October-December 2025 quarter, while Swiggy indicated it would avoid “irrational” pricing strategies such as zero delivery fees.

This shift has direct implications for restaurants and cloud kitchens that rely on quick commerce platforms for last-mile delivery. As platforms prioritise margins, changes in commission structures, discounting strategies, and delivery costs could impact partner businesses.

Zepto is positioning its growth strategy around increasing order volumes without significantly expanding its dark store footprint. With around 1,100 stores, the company has focused on driving higher throughput, reporting average daily orders of 2.4–2.5 million during the January–March period, growing 25–30 percent sequentially.

The company is also targeting value-conscious consumers as a differentiator. Cost optimisation remains a key focus area. Zepto has reportedly reduced supply chain costs by 20–25 percent to around Rs 90–95 per order, largely due to increased order density per dark store.

Despite operational improvements, valuation concerns remain. Zepto last raised $450 million in October 2025 at a $7 billion valuation. However, investors indicate that current market conditions may not fully support similar pricing levels, particularly as listed peers face pressure.

The company’s IPO timing also comes amid broader market caution, with firms such as Walmart-owned PhonePe deferring listing plans due to valuation mismatches. Zepto’s public market entry will be a key test case for the quick commerce business model, particularly in balancing high growth with sustainable profitability in a competitive landscape.