Zepto's IPO: What the quick commerce firm plans to do with the money

As Zepto prepares for a public market debut, the quick commerce company has laid out a clear roadmap for how it intends to use the ₹8,010 crore it plans to raise through its initial public offering (IPO), with a large part of the money earmarked for expanding its dark store network, strengthening technology infrastructure and increasing brand visibility.

According to the company's draft prospectus, the IPO comprises a fresh issue of shares worth up to ₹8,010 crore and an offer for sale by existing investors. The proceeds from the fresh issue will go to the company, while funds raised through the offer for sale will be received by the selling shareholders.

At the heart of Zepto's spending plans is a significant investment in its fulfilment network. The company intends to allocate ₹1,628.98 crore towards setting up new dark stores across existing and new geographies over the next four financial years. The expenditure is expected to be spread across FY27 to FY30, with the largest deployment planned in FY29.

Dark stores are small fulfilment centres that power quick commerce deliveries. Zepto currently operates 1,139 dark stores and 75 warehouses across India. Expanding this network would allow the company to enter new neighbourhoods, reduce delivery distances and support higher order volumes.

The company also plans to spend an even larger ₹1,734.94 crore on lease rentals for its existing dark stores. This indicates that a substantial portion of the IPO proceeds will be used not just for growth but also to support the operating infrastructure that underpins its rapid delivery model.

Technology and brand building

Technology forms the third major pillar of Zepto's capital allocation strategy. The company proposes to invest ₹1,324.78 crore in technology and cloud infrastructure. The spending is aimed at enhancing the platform's scalability, improving operational efficiency and supporting future growth in users, orders and merchant activity.

Zepto's prospectus highlights technology as a core business strength and says continued investment in technology will help unlock scalability, cost efficiencies and margin expansion.

Another ₹520 crore will be invested in subsidiary Zepto Marketplace Private Limited for marketing and business promotion. The objective is to strengthen brand awareness and increase the visibility of the platform as competition intensifies in India's fast-growing quick commerce market. The spending will be spread across FY27 to FY30, with the highest allocation planned in FY29.

The company has also kept the door open for inorganic growth opportunities and general corporate purposes. While the exact amount will be determined closer to the issue, Zepto said spending on acquisitions and corporate purposes together will not exceed 35% of the gross proceeds from the fresh issue. Funding for acquisitions alone cannot exceed 10%, while general corporate purposes will be capped at 25%.

No promoter exit, focus on growth

The IPO also includes an offer for sale of up to 113.5 million shares by existing investors through an offer for sale (OFS), taking the total issue size to roughly ₹11,000 crore. Proceeds from the offer for sale will go directly to the selling shareholders and will not be available to the company.

Interestingly, unlike many recent startup IPOs, Zepto's promoters have chosen not to monetise their holdings and will not sell any shares in the offering. The promoter group currently owns 18.47% of the company, amounting to more than 232 crore equity shares. 

The fund deployment plan comes as Zepto continues to scale rapidly. The company reported revenue from operations of ₹22,623.6 crore in FY26, more than double the ₹11,109.9 crore recorded a year earlier. Its network expanded to 1,139 dark stores by March 2026, while annual transacting users reached 47.97 million.

Taken together, the IPO proceeds suggest Zepto is prioritising deeper market penetration, stronger infrastructure and technology-led execution as it seeks to consolidate its position in India's rapidly expanding quick commerce sector.

However, Zepto has noted that the final deployment of funds could change depending on market conditions, competitive intensity, regulatory developments, availability of suitable locations for new dark stores, technology costs and broader business requirements. Any unutilised funds earmarked for a particular year may be carried forward to subsequent years, giving the company flexibility in executing its expansion plans.

In the January-March quarter of FY26, Zepto overtook Instamart on both net order value and order volumes, reporting an NOV of ₹7,591 crore and 210 million orders, compared with Instamart's ₹5,674 crore and 112.6 million orders. However, Blinkit remained the market leader with an NOV of ₹14,386 crore and nearly 274 million orders.