Zepto may delay IPO as investors push valuation below $3B

Zepto's planned initial public offering may slip past August as the quick commerce company and institutional investors remain stuck on price. Investors are offering $2.5 to $3 billion. Zepto wants more. If the gap does not close in the coming weeks, postponement is on the table.

The company's draft IPO papers with SEBI expire August 21, 2026. That deadline creates pressure, but Zepto is reviewing offers before committing. A source familiar with the negotiations told the Economic Times the company "prefers to list" but will defer if the valuation gap persists.

How did Zepto's valuation fall this far?

In October 2025, US pension fund Calpers led a $450 million round that valued Zepto at $7 billion. Nine months later, institutional investors are offering less than half that figure. The $2.5 to $3 billion range now under discussion also falls below the $3.5 to $4 billion that sources reported to ET in July.

Zepto is also considering a 20% reduction to its planned issue size, cutting it from Rs 8,010 crore to comply with SEBI rules. That suggests the company is preparing for a smaller, more conservative debut if it proceeds.

Anchor book struggles signal deeper skepticism

Zepto approached high-net-worth individuals and retail investors for its anchor book, offering shares at Rs 18.76. The exercise drew limited interest after several large mutual funds stayed away. Mutual fund participation typically anchors confidence in an IPO. Their absence forces the company to seek capital from less conventional sources.

The broader quick commerce sector in India remains competitive. Blinkit, Instamart, and BigBasket continue to expand, and none of them carry the pressure of a looming public listing deadline. Zepto's rush to market, while cash-burning rivals stay private, may be contributing to investor caution.

Festive season shifts to premium, not volume

Separately, India's e-commerce giants are betting on higher margins rather than higher volumes this festive season. Amazon and Flipkart sellers have placed 15 to 25 percent more festive inventory by value compared to last year, but mass-market orders are flat.

Premium product orders are up 20 to 25 percent. Entry-level smartphones saw a slight decline, while televisions 43 inches and above, front-load washing machines, and smartphones above Rs 30,000 are driving inventory builds. Apparel orders rose 15 to 20 percent on continued month-over-month sales growth.

IT sector adds 5,400 jobs in Q1, but hiring logic has changed

India's top six IT firms added over 5,400 employees in Q1 FY27, reversing a 7,100 headcount decline in the previous quarter. TCS led with a net addition of 9,000, its biggest quarterly gain in three years. Wipro also grew headcount.

Infosys trimmed 530 employees after cutting 8,440 in March. Tech Mahindra reduced headcount by 800, down from 2,000 the prior quarter. HCLTech, which reported a 0.5 percent revenue dip, saw the most significant decline.

The shift reflects two forces. Firms no longer hire ahead of uncertain demand. And AI is beginning to reduce replacement hiring needs, though experts say the impact remains marginal for now.

“The Q1 FY27 results indicate a more disciplined hiring environment across the IT and IT services sector, with workforce decisions increasingly aligned to business demand and delivery priorities.”

— Sanketh Chengappa KG, Adecco India

Freshers are returning to hiring pipelines, according to TeamLease Digital, but in far smaller numbers than pre-2023 cohorts. Capability-based recruitment, not volume-led hiring, is the new default.

The IT hiring rebound, modest as it is, contrasts with Zepto's capital market struggles. Public investors are demanding proof of sustainable economics before committing capital. Employers are demanding proof of sustainable demand before committing headcount. The 2021 era of pre-funding bets is gone.

Source: Tech-Economic Times