Zepto’s steep IPO valuation reset is rapidly reshaping investor bets on India’s quick commerce market, putting listed rivals Swiggy and Eternal on course for their strongest monthly performances in years as traders wager that a cash-constrained competitor will struggle to defend market share.
Swiggy shares have surged nearly 24% in July, heading for their best month since the company listed in November 2024. Industry leader Eternal has gained 17%, its strongest monthly advance in more than two years.
Behind the rally is growing pressure on loss-making Zepto, whose planned initial public offering has run into resistance from institutional investors concerned about excessive cash burn and its valuation expectations.
Top domestic mutual funds have pushed back against the price sought by the quick-commerce company. At the same time, large institutional investors have indicated a valuation significantly below its last private funding round, according to reports.
Also Read | Zepto IPO likely deferred over pricing standoff with mutual funds: sources
The valuation now under discussion is about $2.5 billion to $3 billion, sharply below the $7 billion at which Zepto raised $450 million in October 2025 in a funding round led by US-based pension fund Calpers. It is also lower than the $3.5 billion to $4 billion range discussed earlier.
Zepto is negotiating the IPO pricing and could defer the issue over the next couple of weeks if the gap between its expectations and investor demand does not narrow, ET Tech reported, citing people aware of the matter.
The company has not called off the offering. But with the validity of its IPO draft running only until Aug. 21, it has limited time to decide whether to accept a lower valuation, reduce the issue size or delay the listing. Zepto shares also fell more than 20% in the week leading up to the latest IPO discussions, signalling weakening investor appetite.
For Swiggy and Eternal, the funding pressure facing a major rival could provide an opportunity to consolidate their positions in one of India’s fastest-growing consumer industries. Zepto also competes with Amazon.com Inc.’s India operations and Tata Group’s BigBasket.
“Zepto will have to focus on lowering the cash burn now, typically resulting in lower growth and market share loss to incumbents,” Zepto investor and Asmore CIO Rashi Talwar Bhatia was quoted as saying by Bloomberg.
A cash-strapped competitor could help Swiggy the most, Bhatia added, because the company emerging as the second-largest player would typically be the biggest beneficiary.
Swiggy’s ability to finance expansion may strengthen that positioning, even as its quick-commerce operations continue to lose money. Instamart “intends to trade margin for growth,” Nomura analysts wrote following Swiggy’s June-quarter results released Thursday.
Nomura expects cash losses in Swiggy’s quick-commerce segment to continue at least until the fiscal year ending March 2028. However, the brokerage stated that the company can offset those losses using cash generated by its food-delivery business.
That leaves investors betting on an increasingly divergent funding environment. Zepto is facing pressure to curb its cash burn just as Swiggy appears willing and able to keep spending for growth. If that divergence translates into slower expansion by Zepto, Swiggy, and Eternal could emerge with a larger share of India’s quick commerce market.
