How Zepto Is Becoming An ‘Indian’ Company And What’s The Benefit

SOURCE : NEW18 NEWS

Last Updated:May 12, 2025, 19:06 IST

Zepto is shifting shares from foreign to Indian investors to gain Indian company status, a move that could open up fresh business opportunities and regulatory advantages

Zepto, a rapidly growing player in the quick commerce sector, is making headlines as it goes head-to-head with Zomato’s Blinkit. Interest from prominent Indian investors is fuelling Zepto’s expansion, with Motilal Oswal and its founder Ramdeo Agrawal each investing $50 million (approximately Rs 425 crore). Together, they have injected $100 million into Zepto, acquiring shares from early foreign investors such as Rocket Internet and Lachy Groom.

According to Moneycontrol, Zepto is now seeking to secure a majority stake from Indian investors. Motilal Oswal’s firm plans an additional $250 million investment in Zepto, with participation from Indian companies like Edelweiss and Hero Fincorp.

Moneycontrol states that Motilal Oswal is not only involved in the current funding round but is also gearing up to lead a secondaries round worth $250 million for Zepto. The firm plans to gather funds from its domestic investors to purchase shares from Zepto’s foreign investors, thus increasing domestic ownership. Edelweiss and Hero Fincorp are also expected to participate in this $250 million round, where Zepto shares may change hands.

Despite these developments, Zepto’s valuation remains at $5 billion. The strategic move to transfer shares from foreign to Indian investors aims to reclassify Zepto as an Indian company, potentially unlocking new business opportunities.

In a bid to strengthen its market position, Zepto’s main competitor, Blinkit, has already transformed into an Indian owned and controlled company (IOCC). This shift allows Blinkit to manage its inventory independently, bolstering its long-term prospects.

Moneycontrol reports that Blinkit, under a complete inventory-ownership model, anticipates its working capital requirement for FY25 to stay below Rs 1,000 crore. This amount represents about 5 percent of its expected net order value (NOV) of Rs 22,000 crore, attributed to high inventory turnover.

Eternal CFO Akshant Goyal, in a letter to shareholders, mentioned, “As an Inventory Ownership and Control Company (IOCC), we now have the option to own inventory in the quick commerce business. We believe this is vital and a significant step towards enhancing the long-term resilience of our business.”

Meanwhile, Swiggy’s Instamart service has opted not to adopt this model immediately, citing limited business advantages at present, though it remains open to the possibility in the future.

“From an overall economics standpoint, we believe the magnitude of difference can’t be more than 30-35 basis points. But it comes on the back of inventory holding on your balance sheet. So, it is a choice to be made on the commercial model,” Swiggy CFO Rahul Bothra was quoted as saying by Moneycontrol.

According to Moneycontrol, Bothra stated that the commercials don’t necessarily justify pursuing an inorganic route. While he didn’t dismiss a potential future transition, noting that it might be considered “when we believe it is the right time,” he emphasized that there is “no plan in the near future.”

Zepto, the nation’s second-largest quick commerce firm, is aggressively raising funds as the sector experiences rapid growth, attracting keen interest from investors eager to capitalise on the booming market.

First Published:

May 12, 2025, 19:06 IST