From delivering groceries in minutes to gearing up for a stock market debut, Zepto has filed an updated Draft Red Herring Prospectus (DRHP) with the market regulator SEBI recently.
With this latest development, the quick commerce company has moved one step closer to its proposed Initial Public Offering (IPO).
While the IPO includes a sizeable fresh issue aimed at funding future growth, a key portion of the offering will also come from existing investors selling part of their holdings. As per the DRHP filing, Zepto itself will not receive any proceeds from the OFS component, with the sale proceeds going directly to the participating shareholders.
Lets take a look at key shareholders selling stake in OFS and other details of this upcoming IPO –
Fresh issue and OFS: How the IPO is structured
According to the DRHP filing, Zepto’s proposed IPO consists of two parts. The first is a fresh issue of equity shares aggregating up to Rs 8,010 crore. The second is an Offer for Sale of up to 11.35 crore equity shares by existing investors.
The company may also undertake a pre-IPO placement of up to Rs 1,602 crore before the final Red Herring Prospectus is filed. If such a placement takes place, the size of the fresh issue will be reduced accordingly.
As per the filing, the company plans to list its shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Who is selling shares in the OFS?
One of the key highlights of the IPO is the participation of several early investors who are partially monetising their holdings through the Offer for Sale.
| Selling Shareholder | Shares Offered (Up To) |
| Nexus Ventures VI Holdings LLC | 57,357,141 |
| Nexus Ventures VII Holdings LLC | 30,398,907 |
| Razor Ventures Zepto LLC | 9,364,174 |
| Contrary ZEP Holdings LLC | 7,801,378 |
| Kaiser Foundation Hospitals | 4,385,912 |
| Kaiser Permanente Group Trust | 4,159,054 |
| Total | 113,466,566 |
As per the DRHP filing, Nexus Ventures is the largest seller in the OFS. Together, its two investment entities are offering more than 87 million shares for sale.
The filing also shows that Razor Ventures Zepto LLC is selling the largest proportion of its overall holding among the participating shareholders.
What will Zepto do with the proceeds from fresh issue?
Unlike the OFS proceeds, the money raised through the fresh issue will flow directly to the company.
As per the DRHP filing, the company plans to use a substantial portion of the proceeds to expand Zepto’s network of dark stores across India. Apart from this, the company also plans to add around 1,904 new dark stores as it continues to scale its quick-commerce operations.
The proceeds will also be used for lease rental payments for existing facilities, investments in technology and cloud infrastructure, brand building initiatives and potential acquisitions. A portion will additionally be allocated towards general corporate purposes.
Share allocation details
The Zepto IPO is being launched through the book-building route under SEBI regulations.
Breaking down the allocation details, as per the filing, at least 75% of the net offer will be reserved for Qualified Institutional Buyers (QIBs). Similarly, up to 15% will be allocated to Non-Institutional Investors (NIIs). Retail Individual Investors will receive up to 10% of the net offer.
The company has also placed a separate employee reservation portion for eligible employees.
Promoters and key advisors
The DRHP identifies Aadit Palicha and Kaivalya Vohra among the key promoters associated with Zepto.
The issue is being managed by a consortium of investment banks, including Axis Capital, Morgan Stanley, Goldman Sachs, Motilal Oswal Financial Services, HSBC Securities, JM Financial and IIFL Capital Services.
KFIN Technologies has been appointed as the registrar to the issue.
What investors need to watch
As this quick commerce company moves one step closer to launching its IPO, on the other side investors will also be closely monitoring the final issue size, valuation and pricing details.
According to the DRHP filing, the combination of growth funding through the fresh issue and stake sales by existing shareholders will form the core structure of Zepto’s proposed market debut.
Disclaimer: Investment in the securities market is subject to market risks; read all the related documents carefully before investing. This article provides information regarding a Draft Red Herring Prospectus (DRHP) filed with the market regulator and does not constitute an offer, solicitation, or recommendation to buy, sell, or subscribe to any securities. Financial details, valuations, and issue structures are based on preliminary filings and are subject to change; readers should consult a SEBI-registered investment advisor before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.