Zepto’s IPO filing reveals fast growth, bigger losses, and a valuation question nobody’s answered yet

Zepto filed its draft red herring prospectus (DRHP) with India's Securities and Exchange Board of India (SEBI) this week, signaling its intent for an initial public offering (IPO). The quick commerce company reported a significant surge in advertising revenue, which grew by 151% to ₹32.7 crore ($3.9 million) in the fiscal year ending March 31, 2024. This growth outpaced Zepto's overall operating revenue increase of 104%, which reached ₹2,024.5 crore ($242.7 million) during the same period. Despite the advertising gains, Zepto's net losses widened by 3.7% to ₹577.7 crore ($69.2 million) for FY24, compared to ₹557.5 crore ($66.8 million) in FY23. The company's expenses also rose substantially, with total expenses increasing by 68% to ₹2,602.2 crore ($311.9 million) in FY24. Zepto's filing highlights a valuation question that remains unanswered by the market, as the company seeks to go public amidst these financial results. The DRHP also detailed that Zepto's gross merchandise value (GMV) grew by 87% to ₹3,715.5 crore ($445.5 million) in FY24. The company's cash and cash equivalents stood at ₹373.6 crore ($44.8 million) as of March 31, 2024. Zepto aims to use the IPO proceeds for funding its expansion plans and for general corporate purposes.