Zepto has been one of the fastest-growing names in India's quick-commerce story. But just as the company moves closer to the public markets, its shares in the unlisted market have witnessed a sharp correction.
Zepto unlisted shares, which were trading at around ₹38, have fallen to around ₹27 — a decline of approximately 29% in a relatively short period.
The correction comes amid media reports suggesting that Zepto and its investors are discussing a substantially lower valuation for the proposed IPO than the valuation associated with its previous funding round.
At first glance, this may look surprising. Zepto's Updated Draft Red Herring Prospectus (UDRHP) shows rapid growth in orders, revenue, users and its dark-store network. So why is the unlisted market price falling ahead of the IPO?
The answer may lie in an important distinction: a fast-growing business does not necessarily mean an ever-rising valuation.
Here is what Zepto's UDRHP tells us about the business, what recent media reports say about IPO valuation discussions, and what investors should watch as Zepto approaches the public market.
What Happened to Zepto Unlisted Shares?
Zepto unlisted shares have recently corrected from around ₹38 per share to around ₹27 per share, representing a fall of approximately 29%.
The timing is particularly noteworthy because the correction has come as discussions around Zepto's proposed IPO valuation have intensified.
According to recent media reports, Zepto is reportedly exploring its IPO at a post-money valuation of around $3 billion, considerably below the approximately $7 billion valuation reported for its October 2025 funding round.
Media reports further suggest that Zepto had already moderated its IPO valuation expectations to around $4–5 billion, but some domestic institutional investors reportedly sought a further markdown.
These figures should, however, be viewed for what they currently are: reported valuation discussions, not Zepto's officially announced IPO price band.
The UDRHP itself does not specify the final Offer Price. The document states that the Offer Price will be determined by the company in consultation with the Book Running Lead Managers following the book-building process.
Therefore, the reported ~$3 billion valuation should not be interpreted as Zepto's confirmed IPO valuation unless and until the relevant pricing is formally announced.
From ~$7 Billion to ~$3 Billion? Understanding the Reported Valuation Reset
The recent developments are easier to understand as a progression in valuation expectations rather than as one sudden event.
According to the media reports referenced for this article, Zepto raised $450 million in October 2025 at a reported valuation of approximately $7 billion.
More recently, media reports suggested that the company was considering a valuation of around $4–5 billion for its IPO.
Subsequent reports have suggested that leading domestic mutual funds were unwilling to participate even at that range and were seeking a further 30–40% reduction.
The latest media reports cited for this article indicate discussions around a post-money valuation of approximately $3 billion, with a pre-money valuation of around $2.5 billion.
Importantly, these are media-reported discussions involving Zepto, its investors, bankers and prospective institutional investors. They should not be confused with a formally declared IPO valuation or price band.
And this distinction is central to understanding what may be happening in the unlisted market.
If market participants had previously priced Zepto shares on expectations of an IPO valuation closer to earlier private-market benchmarks, reports of substantially lower IPO valuation discussions can change those expectations quickly.
But has Zepto's underlying business also deteriorated?
The UDRHP paints a much more nuanced picture.
Zepto's Business Has Been Growing at a Remarkable Pace
While the unlisted share price has corrected, Zepto's operating scale expanded substantially between FY24 and FY26.
According to the UDRHP, total orders increased from 132.87 million in FY24 to 332.11 million in FY25 and 640.18 million in FY26.
Orders per day increased from 363,033 in FY24 to 909,881 in FY25 and 1,753,915 in FY26.
Zepto's Annual Transacting Users increased from 10.57 million in FY24 to 38.38 million in FY25 and 47.97 million in FY26.
Its closing dark-store count expanded from 337 in FY24 to 1,029 in FY25 and 1,139 in FY26.
Net Receivables Value (NRV) increased from approximately ₹5,231.70 crore in FY24 to ₹12,703.73 crore in FY25 and ₹24,815.54 crore in FY26.
The numbers make one thing clear: the recent correction in Zepto's unlisted share price has occurred despite significant growth in the scale of the underlying business.
That brings us to the other side of the equation — profitability and cash consumption.
Revenue Doubled in FY26, but Zepto Remained Loss-Making
Zepto's revenue growth has been substantial.
Revenue from operations increased from approximately ₹4,454.52 crore in FY24 to ₹11,109.95 crore in FY25 and ₹22,623.58 crore in FY26.
That means FY26 revenue from operations was more than 2x FY25 revenue.
But rapid revenue growth has not yet translated into profitability.
According to the UDRHP, Zepto reported a restated consolidated loss for the year of approximately:
| Financial Year | Revenue from Operations | Restated loss for the Year |
|---|---|---|
| FY24 | ₹4,454.52 crore | ₹1,214.79 crore |
| FY25 | ₹11,109.95 crore | ₹4,699.71 crore |
| FY26 | ₹22,623.58 crore | ₹5,905.19 crore |
So while revenue more than doubled in FY26, Zepto continued to report a significant absolute loss.
But looking only at the total loss misses another important part of the story.
Zepto Is Still Losing Money — But Its Unit Economics Show Improvement
Quick-commerce businesses operate at enormous transaction volumes, which makes per-order economics particularly relevant.
Zepto itself discloses Adjusted EBITDA per Order as one of its performance indicators.
For FY26, Zepto reported:
Adjusted EBITDA: (₹5,041.55) crore
Adjusted EBITDA per Order: (₹78.75)
For comparison, Adjusted EBITDA per Order was (₹136.15) in FY25 and (₹84.64) in FY24.
The annual comparison is therefore not a straight-line improvement — FY25 was significantly weaker on this metric before FY26 improved.
The quarterly trend provides further context.
According to the UDRHP, Zepto's Adjusted EBITDA per Order improved from (₹95.84) in the quarter ended June 30, 2023 to (₹59.40) in the quarter ended March 31, 2026.
Zepto remains loss-making, but the UDRHP also shows improvement in certain per-order economics as the platform has scaled.
Cash Burn Remains an Important Part of the Zepto Story
Growth at this pace requires capital.
For FY26, the UDRHP's KPI disclosures show:
Net cash used in operating activities: approximately ₹3,462.44 crore
Free Cash Flow: approximately (₹4,329.54) crore
Free Cash Flow per Order: (₹67.63)
Zepto's closing cash balance, including investments, stood at approximately ₹5,680.53 crore.
So Zepto enters the IPO phase with a rapidly expanding business, but also one that continues to consume substantial cash.
That helps explain why investors assessing Zepto's IPO have to consider more than revenue growth alone.
Why Could Investors Want a Lower Valuation Despite Such High Growth?
A valuation does not simply measure whether a company is growing.
It reflects how much investors are willing to pay for that growth, considering profitability, cash flows, competition, future expectations and risk.
This is where the reported institutional pushback on Zepto's IPO valuation becomes particularly interesting.
According to recent media reports, Zepto reportedly wanted its IPO valuation to be considered alongside listed companies such as Eternal and Swiggy, while prospective investors reportedly questioned the comparison because those companies have broader businesses beyond quick commerce.
Zepto's own UDRHP provides useful context here.
For peer benchmarking, it compares Zepto's quick-commerce operating metrics with Blinkit and Instamart.
In FY26:
Zepto: 640.18 million orders
Instamart: 412.20 million orders
Blinkit: 916.60 million orders
The closing store counts were:
Zepto: 1,139
Instamart: 1,143
Blinkit: 2,243
These figures demonstrate both Zepto's scale and the intensity of competition in quick commerce.
Therefore, the valuation debate is not necessarily a debate over whether Zepto is growing.
The question is:
What valuation should investors assign to that growth while the business remains loss-making and cash-flow negative in a highly competitive market?
That is a very different question.
What Was Zepto Planning to Raise Through the IPO?
The UDRHP contemplated a combination of a Fresh Issue and an Offer for Sale (OFS).
The Fresh Issue was proposed at up to ₹8,010 crore.
Separately, existing shareholders proposed an OFS of up to 113,466,566 equity shares.
The selling shareholders named in the UDRHP include entities associated with Nexus Ventures, Contrary, Razor Ventures and Kaiser Permanente.
Money raised through the Fresh Issue goes to Zepto, subject to issue expenses and the proposed utilisation of proceeds.
Proceeds from the OFS go to the selling shareholders, and Zepto does not receive those proceeds. The UDRHP explicitly states that the company will not receive any proceeds from the OFS.
Recent media reports have subsequently suggested that the eventual fresh issue could be smaller than what was contemplated in the UDRHP.
That reported development remains separate from the terms disclosed in the UDRHP and should be treated as such until reflected in subsequent official offer documents.
Where Does Zepto Plan to Use the IPO Proceeds?
The UDRHP provides an interesting answer — and once again, dark stores feature prominently.
Among the proposed uses of Net Proceeds were:
- approximately ₹1,628.98 crore for expanding the dark-store network through new dark stores in existing and new geographies;
- approximately ₹1,734.94 crore towards lease rentals of existing dark stores;
- approximately ₹1,324.78 crore towards technology and cloud infrastructure; and
- ₹520 crore for investment in Zepto Marketplace Private Limited towards marketing and business promotion.
This tells investors something important about the IPO.
Zepto is not approaching the public markets as a mature, cash-generating company simply seeking a listing.
The proposed fresh capital is intended, among other things, to continue investing in expansion and infrastructure.
Why is Zepto's Unlisted Share Price Falling Before the IPO Price Is Announced?
This is perhaps the most important point for investors in the unlisted market.
Zepto's unlisted share price is not its IPO price.
The ₹27 price prevailing in the unlisted market does not mean Zepto's IPO will happen at ₹27.
Likewise, a media-reported ~$3 billion valuation does not automatically establish Zepto's final IPO valuation.
The UDRHP does not contain the final Offer Price, which is to be determined later as part of the offer process.
Until then, unlisted-market prices can respond to changing expectations around the IPO.
If investors had priced Zepto's unlisted shares expecting an IPO valuation closer to its earlier private-market valuation, reports of a significantly lower IPO valuation could reduce the expected upside and, in turn, put pressure on the unlisted share price.
That can affect demand and price in the secondary market even though the underlying company's operations have not suddenly changed.
It is one of the key risks of investing in companies before an IPO:
expectations can be repriced before the company itself reaches the stock exchange.
Does the Fall From ₹38 to ₹27 Make Zepto Unlisted Shares Cheap?
Not necessarily.
A stock becoming 29% cheaper than its earlier market price does not automatically mean it has become undervalued.
The question isn't:
Zepto was ₹38 and is now ₹27, so is ₹27 cheap?
The better question is:
What valuation does ₹27 imply, and is that valuation justified by Zepto's growth, losses, cash flows, competitive position and future profitability?
For Zepto, that assessment becomes especially important because the company is simultaneously showing very high growth and substantial losses.
The UDRHP shows 640.18 million orders in FY26, ₹22,623.58 crore of revenue from operations and 47.97 million Annual Transacting Users.
But the company also reported a ₹5,905.19 crore restated loss for FY26.
Neither the growth numbers nor the loss figure alone determines what Zepto should be worth.
Zepto Limited Unlisted Shares
Private-Market Valuation and IPO Valuation Are Two Different Things
Zepto's situation also highlights a broader lesson about pre-IPO investing.
A valuation achieved during a private funding round does not guarantee that the company's IPO will happen at the same valuation — or at a higher one.
Private funding rounds involve negotiated transactions between the company and a relatively small group of investors, often with specific securities and contractual terms.
The unlisted market has its own demand, supply and liquidity dynamics.
An IPO introduces another level of price discovery involving institutional investors, anchor investors, non-institutional investors and retail investors through the public-market framework.
Once listed, the market can continuously reassess the company's valuation.
Therefore:
Private valuation ≠ Unlisted market valuation ≠ IPO valuation ≠ Post-listing market capitalisation
They may influence each other, but they are not interchangeable.
The Bigger Picture: Has Zepto Changed, or Has the Price Investors Are Willing to Pay Changed?
That is ultimately what makes the current situation interesting.
Zepto's UDRHP shows a company growing at tremendous speed.
Orders increased from 132.87 million in FY24 to 640.18 million in FY26.
Annual Transacting Users increased from 10.57 million to 47.97 million.
Revenue from operations increased from approximately ₹4,454.52 crore to ₹22,623.58 crore over the same period.
At the same time, Zepto remains loss-making and cash-flow negative, operating in an intensely competitive quick-commerce market.
Against that backdrop, media reports suggest that prospective IPO investors are pushing for a valuation substantially below the levels associated with Zepto's previous private funding round.
And the unlisted market appears to be repricing expectations.
Zepto's business may still be growing rapidly. What may have changed is the price investors are willing to pay for that growth.
For investors, that distinction matters far more than whether the share was ₹38 yesterday and ₹27 today.
The next major signal will come when Zepto's actual IPO pricing is formally disclosed.
Until then, the dark stores are expanding — but the valuation question remains very much in the spotlight.
