Top Funds Urge Significant Valuation Reduction for Zepto’s Upcoming IPO
Zepto, a prominent startup in the quick commerce space, is preparing for a proposed initial public offering (IPO) projected at up to ₹8,010 crore. However, the path to this listing appears rocky as top domestic mutual funds have raised concerns regarding its valuation expectations. Initially valued at a peak of $7 billion in late 2025, Zepto is now looking to adjust its IPO valuation to around $4-5 billion. Despite this reduction, mutual funds are reportedly seeking valuations that are 30-40% lower than Zepto’s new target, complicating the negotiations ahead of the anticipated launch in the next two weeks.
The reservations expressed by the domestic asset managers are significant, given their crucial role in the success of recent IPOs in the Indian market. They have leveraged considerable influence, particularly through participation in anchor books and pre-IPO funding rounds. Mutual funds have remained non-committal thus far in terms of their participation, indicating that consensus among large investors is pivotal for moving forward. The ongoing discussions are reportedly centered around enticing more High Net Worth Individuals (HNIs) and family offices to enhance participation and bridge the valuation gap, showcasing the current delicacy of investor sentiment surrounding new-age tech IPOs.
For Indian investors, the situation reflects an increasing caution towards high-valuation startups and new-age businesses. The mixed performance of recent IPOs has added to investor wariness, as seen in the case of Swiggy, which trades significantly below its IPO price. As mutual funds carefully assess the viability of investing in Zepto against the backdrop of broader market trends, individual investors should remain vigilant and informed. The potential for valuation adjustments and the scrutiny from asset managers signal a more measured approach to IPO participation in the evolving landscape of India’s equity markets.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova IPO team.)