Zepto To File Confidential DRHP: Why Do Companies Opt For This Route To Launch IPO?
Since its launch, it has raised about $1.8 billion, or nearly Rs 16,000 crore, from leading global and domestic investors.
Quick commerce unicorn Zepto is set to pre-file its draft red herring prospectus (DRHP) with market regulator SEBI on Dec. 26. The filing will be done through the confidential route, according to news agency PTI. The company is targeting a stock market listing sometime next year.
This move could make Zepto one of the youngest startups to list on Indian stock exchanges. If things go as per plan, Zepto will join its key rivals that are already listed. Zomato, owned by Eternal, was listed on the stock exchanges in 2021. Swiggy made its market debut in November 2024.
Zepto is currently valued at around $7 billion. Since its launch, it has raised about $1.8 billion, or nearly Rs 16,000 crore, from leading global and domestic investors.
Zepto became a unicorn in August 2023 after raising $200 million in its Series E funding round. The funding valued the startup at $1.4 billion. Founded by Stanford University dropouts Aadit Palicha and Kaivalya Vohra, Zepto quickly expanded its 10-minute grocery delivery model across several major Indian cities.
Why Companies Opt For Confidential Route While Filing IPO
Many companies have lately opted for the confidential route to launch their IPOs. Some of the top names include Tata Capital, Swiggy, PhysicsWallah and Meesho, among others.
The reason behind opting for the confidential route to file draft papers with the Securities and Exchange Board of India (SEBI) is that companies aim for flexibility while preparing for an IPO in uncertain market conditions. By filing DRHPs confidentially, companies can assess investor interest without public pressure. This approach helps firms assess factors such as valuations and timelines, among others. This route also helps the companies protect sensitive operational and financial information from competitors.
As per the SEBI mandate, companies must launch their IPO within 12 months of receiving approval. However, firms that choose the confidential filing route are allowed a longer window of up to 18 months to launch their public issue.
