Zepto, one of Mumbai-based quick-commerce firm, just had the blessings from the NCLT or National Company Law Tribunal for big reverse merger move; however, which paved the path in allowing Mumbai to become their future domicile where plans are due with an initial public offering by the year end. Approvals included here entail amalgamation among Kiranakart Pte Ltd and Kiranakart Technologies Pvt. Ltd; amalgamations thus set an integral operation for further reforms.
PC: Times of India
In the order passed on January 9, 2025, NCLT says that, in its judgment, the board of directors believes the reverse merger to be in the best interests of the entity and its stakeholders such as the shareholders, the employees, and the creditors. It is supposed to simplify Zepto’s processes and improve regulatory compliance in India to better support the increasing customer base.
This move to change its domicile is seen as a strategic play to access the emerging Indian market better. As the quick commerce sector grows, Zepto wants to cement its position as one of the leaders in the industry.
As part of its expansion plan, Zepto is preparing for an IPO that will be worth between $400 million and $500 million. To make this happen, the company has hired major investment banks such as Goldman Sachs, Morgan Stanley, and Axis Capital. The IPO will likely attract significant investor interest given the growth story and market presence of Zepto.
Recently, Zepto secured $350 million funding, led by Motilal Oswal Private Wealth, in a round that valued the company at approximately $5 billion. As part of its overall financial strategy, Zepto has secured $1.85 billion since its inception, with $1.35 billion in 2024 alone. Such funding clearly indicates the investors’ confidence in Zepto’s business model and future prospects.
For the fiscal year ending in March 2024, Zepto reported a robust revenue growth of 2.2 times, with the revenue going up to Rs 4,454 crore, compared to the previous fiscal at Rs 2,026 crore in FY23. Even though it was a pretty impressive revenue increase, the company recorded losses at Rs 1,248.6 crore, a slight 2% fall from the last fiscal. This means that although Zepto is expanding its operations and gaining more market share, it is still undergoing financial challenges associated with rapid growth in competitive sectors.
Zepto operates in a highly competitive landscape, characterized by other significant players in the quick commerce space. The company has distinguished itself through its efficient delivery model and a focus on customer satisfaction, which have contributed to its growing user base and market share.
As Zepto readies itself for its IPO and continues to improve its operational capabilities, the company is likely to focus on improving its profitability metrics. The approval of the reverse merger is a critical step in this journey, allowing Zepto to align its business strategy with the regulatory environment in India.
