Zepto In Discussions For Secondary Share Sale Worth $250 Million Ahead Of IPO: Report

The private equity divisions of Motilal Oswal Financial Services Ltd. and Edelweiss Financial Services Ltd. are reportedly in talks with the start-up to acquire shares in the secondary sale.

Reportedly, the primary objective behind the sale is to enhance the stake of Indian investors in Zepto’s shareholding structure before its planned IPO, likely in late 2025 or early 2026.

Source : Zepto

Zepto entered discussions for a secondary share sale worth up to $250 million. This move aimed to raise Indian investor ownership before the company goes ahead with its public listing planned later in the year.

The private equity divisions of Motilal Oswal Financial Services Ltd. and Edelweiss Financial Services Ltd. are reportedly in talks with the Bangalore-based start-up to acquire shares in the secondary sale, reported Bloomberg.

Citing sources familiar with the negotiations, the report said that the online grocery start-up would not receive fresh capital from this transaction, but employees and some existing investors could sell their shares for cash. The deal is expected to take place at a valuation of just over $5 billion, consistent with Zepto's latest funding round from late last year, the sources added.

The primary objective behind the sale is to enhance the stake of Indian investors in Zepto’s shareholding structure before its planned initial public offering, likely in late 2025 or early 2026.

Currently, Indian investors hold approximately 33 per cent of Zepto’s equity, with co-founders Aadit Palicha and Kaivalya Vohra controlling about a fifth of the firm. The report noted that the company intended to raise the proportion of Indian shareholding to around 50 per cent.

Market Trends and Competitive Landscape

Secondary share sales have often been contentious, as they allow employees and executives to liquidate shares before an IPO, which some believe reduces long-term commitment to the business. However, such transactions have gained acceptance as a method to reward employees and provide liquidity to early investors.

Zepto operates in India’s intensely competitive, low-margin grocery delivery market. Its rivals include Amazon India, Swiggy Ltd. (backed by SoftBank Group Corp.), and publicly listed Zomato Ltd.

Palicha and Vohra, both 22, founded Zepto in 2021 after dropping out of Stanford University’s computer science program. The duo, childhood friends, returned to India as teenagers to build their startup.