Zepto’s IPO
India’s fast growing quick commerce platform Zepto has recently received SEBI approval for its IPO. Usually, such news increases the enthusiasm of investors, but on the contrary, a decline of about 30% has been recorded in the unlisted shares of the company in the last one month. This decline reflects the caution of investors and the current market conditions.
In the pre-IPO market, Zepto shares were trading at around Rs 52 a month ago, which have now come down to around Rs 40. Market experts say that this decline is not due to any company-specific negative news, but is the result of widespread weakness in the unlisted stock market. According to dealers, currently the valuation of Zepto in the unlisted market is being estimated at around Rs 38,000 crore. After the high valuations of startups in the last few years, investors have now become more cautious and are re-evaluating the valuations of companies.
impact of market weakness
There has been ups and downs in the Indian stock market this year. Benchmark Nifty has been under pressure, while foreign institutional investors (FIIs) also seem cautious about Indian markets. Rising crude oil prices, global economic uncertainty and geopolitical tensions have increased investor concerns. For this reason, many companies have postponed their IPO launch plans or have adopted a wait and watch strategy. Its effect is also visible on pre-IPO and unlisted stock market.
Zepto’s big IPO plan
Zepto is preparing to raise about 1.3 billion dollars i.e. about Rs 11,000 to 12,000 crore through its IPO. This issue can be included in the biggest Internet IPO after the listing of Swiggy. The proposed IPO is likely to include both new share issue and stake sale (OFS) to existing investors. If all goes according to plan, Zepto could become India’s youngest venture-backed startup to get listed on the stock exchange in just four years.
Increasing competition is also a challenge
Competition is continuously increasing in the quick commerce sector. Zepto competes with big players like Blinkit, Swiggy Instamart, Flipkart Minutes and Amazon Now. To attract customers, companies are giving huge discounts and promotional offers, due to which the expenditure is also increasing rapidly. Experts believe that the recent decline in unlisted shares reflects short-term investor caution. However, the final valuation of the company and the market condition at the time of IPO launch will decide how investors react. Currently, Zepto’s IPO is being considered one of the most talked about public issues of this year.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.
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