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Zepto IPO Faces Investor Valuation Revolt
27 Jul
Summary
- Top mutual funds reject Zepto's IPO valuation concerns.
- Zepto seeks $4-5 billion valuation, but funds want 30-40% less.
- Disagreement over valuation impacts Zepto's IPO launch timeline.
Top domestic mutual funds have reportedly pushed back against the valuation sought by quick commerce startup Zepto for its initial public offering (IPO), potentially complicating the company's plans for an early launch. Asset managers, significant investors in recent IPOs, have informed Zepto representatives that they are uncomfortable subscribing to the issue even at the company's revised valuation expectations.
Zepto is said to be considering a valuation of around $4-5 billion, a decrease from its previous peak valuation of $7 billion in October 2025. However, mutual funds and large domestic insurers are reportedly seeking valuations 30-40% lower than this reduced target. This has prompted bankers and investors to work on persuading money managers to find common ground.
The participation of domestic funds and insurers is deemed crucial for the IPO's success, given their significant role in anchor books and pre-IPO rounds. Fund managers have also expressed reservations about benchmarking Zepto's valuation against listed rivals like Eternal and Swiggy, arguing that Zepto lacks a food delivery business, a key component of those companies' valuations. Concerns also stem from the post-listing performance of some recent new-age tech listings.
