Unlisted shares of quick commerce giant Zepto have taken a significant hit after the company reportedly put its initial public offering (IPO) plans on hold. This development comes amidst growing concerns among investors regarding the startup's valuation and its path to profitability.
Shares Plummet Over 50% from Highs
According to dealers in the unlisted market, Zepto's shares have plunged to levels around Rs 23-24, a sharp drop from Rs 30-32 just a month prior. The shares have cracked more than 50% from their peak of approximately Rs 58, even briefly touching lows of Rs 21-22 when the IPO halt became internal knowledge.
Valuation Reset and Profitability Demands
Narottam Dharawat, co-founder of Mumbai-based Dharawat Securities, highlighted the reluctance of major institutions to offer premium valuations to companies with high cash burn rates and no clear route to profitability. Dharawat noted that many existing investors in Zepto are now 'trapped,' with the stock trading significantly below their buying levels. He cautioned that while high cash burn might fuel growth, investors will eventually demand a positive balance sheet, citing numerous examples of companies being penalized for sustained losses.
IPO Size Trimmed Amid Investor Skepticism
Zepto, which initially aimed to raise around Rs 8,000 crore through its IPO, has reportedly scaled down its target to Rs 5,000-6,000 crore. Sources indicate that domestic mutual funds were valuing Zepto at approximately $2.5-$3 billion (Rs 24,000-28,000 crore) post-money, a stark contrast to the company's initial plans of a $5 billion valuation and its recent funding round at $7 billion just six months ago.
Even at Rs 24 per share, Zepto commands a valuation exceeding Rs 30,000 crore. However, the company reported net and operational losses, burning over Rs 900 crore each quarter, leaving it with only about three quarters of cash – a significant concern for potential investors.
Operational Scale vs. Financial Performance
Despite the financial challenges, Zepto has demonstrated considerable operational scale. As of March 31, 2026, the company processed an average of 17.5 lakh orders daily and operated 1,139 stores. Its annual transacting user base reached nearly 48 million, handling approximately 210 million orders in the March 2026 quarter, translating to about 23.3 lakh orders per day.
Startup Valuations Under Scrutiny
Piyush Jhunjhunwala, Founder & CEO of Stockify, described the situation as a 'startup valuations concern,' pointing to a mismatch between private market expectations and institutional investors' capacity to pay. He emphasized that strong revenue growth alone no longer guarantees premium valuations. Jhunjhunwala added that while Zepto has achieved substantial growth and scale, clear visibility into profitability has become paramount for companies transitioning from private to public markets.