Zepto IPO: SEBI Nod Clears Path for ₹12,000 Cr

SEBI clearance moves Zepto closer to listing

Quick commerce startup Zepto has received approval from the Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO), according to people aware of the matter. The clearance is described as an in-principle nod, which is a key regulatory milestone before the company proceeds with updated filings. Zepto is now expected to file an updated draft red herring prospectus (DRHP) in the next six to eight weeks. The company had earlier used the confidential filing route, which allows engagement with the regulator without making detailed financial disclosures public at the outset. This route has also been used by companies such as Swiggy, Groww, and Meesho ahead of their respective listings. Zepto did not respond to queries from The Economic Times on the development.

What Zepto has filed so far

Zepto had filed a confidential DRHP in December for an IPO that was expected to be in the range of ₹11,000-12,000 crore. People aware of the plan said the issue was largely expected to be a primary issuance, meaning proceeds would go to the company rather than primarily to selling shareholders. The final size and pricing remain undecided and could still be revised. That flexibility is one reason companies prefer confidential filings when they want to refine structure and timing before going public. SEBI’s nod clears a major step, but it does not automatically lock the final issue parameters. The next formal disclosure step for Zepto is the updated DRHP, which will reflect the latest numbers and the final structure being pursued.

Updated DRHP timeline and what it signals

The expected filing window for the updated DRHP is six to eight weeks, according to sources cited in reports. Other reports have also linked the updated prospectus to the inclusion of FY26 financial numbers. Separately, some coverage has indicated Zepto is in the “testing the waters” (TTW) phase, which is a pre-marketing process to gauge interest from qualified institutional buyers (QIBs) before formally pricing the issue. Sources have also said the company may need to submit a certificate confirming completion of the TTW process as part of the path to final regulatory clearance. In practical terms, these steps suggest Zepto is working on both regulatory readiness and institutional demand assessment in parallel. While the regulatory process is progressing, the company still has room to adjust size, valuation expectations, and timing.

Target IPO size: ₹11,000-12,000 crore

Across multiple reports referenced in the provided material, the fundraising ambition has stayed broadly consistent. Zepto’s IPO has been discussed as a ₹11,000-12,000 crore issue, and some reports have also translated that to roughly $1.2-1.3 billion. The structure has been described in two ways: largely a primary issuance in one account, and a mix of fresh issue plus offer for sale (OFS) by early investors in others. What remains consistent is that the company is planning a sizeable public issue relative to recent Indian internet IPOs. The final mix of fresh issue and OFS will matter to investors because it influences how much capital goes into the business versus providing liquidity to existing shareholders.

Pre-IPO roadshows and the profitability pitch

The Economic Times reported in April that Zepto had begun engaging institutional investors as part of its pre-IPO roadshows. In those discussions, Zepto pitched a target of reaching full-year post-tax profitability by fiscal 2029. At the same time, the company indicated it wanted to continue growing at 25-30% quarter-on-quarter, according to the same report. These numbers provide a window into how the company is framing its near-term growth ambitions alongside a longer profitability timeline. For IPO investors, this mix usually becomes central to valuation debates, particularly in consumer internet businesses where growth and cash burn can move together.

Confidential filing route: why it matters

Zepto’s use of the confidential filing route has been highlighted repeatedly in the supplied material. Under this mechanism, a company can file draft papers privately and receive SEBI feedback without making financials public from the outset. This is often used when companies want flexibility to refine disclosures, issue structure, and timing while reducing early public scrutiny. It can also help avoid repeated public revisions if market conditions change. However, once the company moves to an updated DRHP and later the final prospectus, the market will get a clearer view of financial performance and risk factors. Investors typically watch these documents closely for unit economics, working capital needs, and any regulatory or operational dependencies.

Listing window: what reports suggest

Some reports in the provided material have suggested a potential listing window between July and September 2026, while other timelines have pointed to the possibility of reaching the market by the end of June if the process stays on track. These dates should be treated as indicative rather than confirmed, since Zepto’s final size and pricing have been described as undecided. Market conditions, investor feedback during TTW, and SEBI’s review of updated filings can all influence the final schedule. The key near-term milestone remains the updated DRHP, which would signal that the company is ready to move from confidential engagement to public disclosure.

Key facts table

Market impact: why this approval is closely tracked

SEBI’s nod removes what one report called the single biggest regulatory hurdle before a public listing, and it allows Zepto to progress to updated filings and further investor engagement. For the broader quick commerce sector, a large IPO process can become a reference point for valuations and disclosure standards, especially as the category matures in India. The scale being discussed, ₹11,000-12,000 crore, also places Zepto among the more closely watched venture-backed listings in the pipeline. At the same time, the company’s own messaging around profitability by FY2029 and continued high quarter-on-quarter growth highlights the balancing act that public market investors will scrutinise when full disclosures emerge.

Analysis: what to watch next

The most actionable near-term catalyst is the updated DRHP, because it is expected to clarify issue structure, updated financials, and material risk disclosures. Investors will also watch how Zepto frames capital use if the issue remains largely primary, since proceeds allocation can influence the credibility of a profitability timeline. Separately, the TTW process, where referenced, indicates the company is actively testing institutional appetite and valuation comfort. Since final size and pricing have explicitly been described as open to revision, the range of ₹11,000-12,000 crore should be seen as a current reference point rather than a locked target.

Conclusion

Zepto’s receipt of SEBI’s in-principle IPO approval marks a significant step in its path to a public listing. The company is expected to move next by filing an updated DRHP in six to eight weeks, after which the market should get clearer details on structure, pricing approach, and updated numbers. Reports also indicate ongoing institutional engagement through pre-IPO roadshows and the TTW process. The next set of filings will determine how quickly Zepto can move from regulatory progress to an executable listing timetable.