Zepto flags losses, ED summons as risks in IPO filing

Quick commerce unicorn Zepto has identified a history of significant operating losses, recent summons from the Enforcement Directorate to its promoters, and intensified regulatory scrutiny over consumer protection as primary risk factors for its upcoming initial public offering (IPO).

In its updated Draft Red Herring Prospectus filed on Monday, the Bengaluru-headquartered firm disclosed that it has incurred losses in every fiscal year since its inception in July 2021, and warned that it may continue to face negative cash flows as it expands its operations.

“We may continue to incur losses and negative cash flows from operating activities as we invest in expanding our user base and technology infrastructure, adding new product categories to our platform, expanding our private labels, expanding our supply chain operations, increasing the count of dark stores, and developing and improving the brand and visibility of our platform, among others. “There is no assurance that such investments will enable us to increase our revenue in the future,” Zepto said.

Further, the company said its revenue growth may decline due to slowing demand, limited product categories that do not sufficiently address customer needs, or insufficient growth in the number of platform participants caused by increasing competition, alongside rising regulatory and compliance costs, among other factors.

The document showed that Zepto saw its net loss widen to Rs 5,905.19 crore in fiscal year 2025-26, from a loss of Rs 4,699.71 crore in the previous fiscal, whereas the company’s revenue from operations more than doubled during the fiscal year, reaching Rs 22,623.58 crore in FY26 compared to Rs 11,109.94 crore in FY25.