Zepto’s UDRHP can be accessed here.
Quick commerce firm Zepto filed its updated draft red herring prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI) on June 8, 2026, for an initial public offering (IPO) comprising a fresh issue of Rs 8,010 crore and an offer for sale by existing investors. Here is what the filing discloses.
1. ED summons to both founders: The Enforcement Directorate (ED) sent summons dated April 8, 2026 to promoters Aadit Palicha and Kaivalya Vohra under the Foreign Exchange Management Act, 1999 (FEMA), asking them to produce:
- Details of foreign and overseas investments.
- Audited balance sheets since financial year 2020-21.
- Shareholding patterns, loans, guarantees, immovable properties, income tax returns, and bank account details.
- A note on Zepto’s business model.
The founders complied as follows:
- Vohra appeared before the ED on April 17 and April 22, 2026.
- Palicha appeared on April 20 and May 15, 2026.
Both supplied follow-up information on Zepto’s holding structure, its corporate restructuring scheme, and business agreements and invoices.
Zepto said it has received no further communication from the ED since responding. However, it warned that the matter could escalate into investigations, proceedings, or penalties. The filing separately states Zepto is a “foreign owned and controlled” company under the Consolidated Foreign Direct Investment (FDI) Policy and FEMA Rules, which restrict the businesses it can enter and the Indian companies in which it can invest.
2. A dark patterns fine, despite a clean self-declaration: The Central Consumer Protection Authority (CCPA) issued a show cause notice on January 30, 2025 to subsidiary Zepto Marketplace Private Limited (ZMPL) over two alleged dark patterns:
- Basket Sneaking: Zepto allegedly pre-ticked a membership pass fee and added it to the cart without user consent.
- Drip Pricing: Zepto allegedly failed to disclose handling fees in the initial offer and displayed them only in the final price.
Zepto contested both allegations, saying users could see the membership option and remove it with a single click, and that all charges were displayed before payment.
Through an order dated December 4, 2025, the CCPA directed ZMPL to:
- Stop the practices.
- Conduct regular self-audits and publicly disclose the results.
- Pay a penalty of Rs 7 lakh.
Zepto appealed to the National Consumer Disputes Redressal Commission (NCDRC), which granted an interim stay on January 20, 2026. The penalty followed Zepto’s own self-audit declaration asserting that it did not use dark patterns, highlighting a gap in the regulator’s self-regulation framework. The matter remains pending.
3. A second CCPA notice, on MRP overcharging: The CCPA issued another notice on June 4, 2025 to ZMPL for “Drip Pricing” and “Disguised Advertisement”, alleging the platform listed products above their maximum retail price (MRP), a checkout-design practice MediaNama has reported on. Zepto replied that:
- The overcharging resulted from inadvertent technical overlaps.
- Sellers provide all pricing and MRP data on its marketplace.
- The conduct does not meet the legal definition of an unfair trade practice.
The matter remains pending.
4. A CCI antitrust complaint: The All India Consumer Products Distributors Federation (AICPDF) filed information before the Competition Commission of India (CCI) alleging anti-competitive conduct by several quick commerce platforms, including ZMPL. Through an order dated May 29, 2026, which Zepto received on June 2, 2026, the CCI sought details from ZMPL within four weeks. The CCI has not opened a formal investigation. Zepto said it will contest any proceedings.
5. An accessibility lawsuit: A civil writ petition challenging the accessibility of Zepto’s platform for persons with disabilities is currently pending.
6. 48,011 workers moved to payroll: Until the quarter ended March 31, 2026, Zepto staffed dark stores through third-party contractors for roles including pickers, packers, hub loaders, associates, and other operating staff. The company has now moved 48,011 such employees onto its own payroll, stating that the shift provides better operational control and compliance. Zepto also flagged that new central laws governing social security, occupational safety, industrial relations, and wages will increase its compliance burden.
7. Two delivery partner strikes and wage-related cases: The filing records two strikes and separate labour-related proceedings:
- May 2025, Hyderabad: Delivery partners struck over low payouts and incentives.
- October 2025, Delhi: Delivery partners struck over Diwali incentives.
- December 2025: A small number of dark stores faced brief disruptions.
- Karnataka: Labour authorities have brought minimum wage proceedings against Zepto representatives.
- September 2024: A labour inspector filed a criminal complaint against Vohra, alleging the company failed to maintain wage registers and provide wage slips.
Zepto said it held discussions during both strikes but did not alter its fee or incentive structures.
8. Rising DPDP compliance costs: Zepto acknowledged that compliance with the Digital Personal Data Protection Act, 2023 (DPDP Act), and the Digital Personal Data Protection Rules, 2025 (DPDP Rules), will increase costs. The company noted that substantive obligations take effect 18 months after notification, while limited governance provisions are already in force. It added that its obligations may evolve as interpretations of the law develop.
As Zepto grows and processes more personal data, it said the scale and liability associated with any potential data breach could increase. The company also warned that its platform and its “Zepto Atom” data insights tool could face social-engineering attacks, ransomware incidents, and other cybersecurity threats. However, it reported no material data breach during the past three financial years.
9. Food safety proceedings: Food safety officers in Maharashtra have filed adjudication applications against Zepto establishments under the Food Safety and Standards Act, 2006. Separately, a local authority in Tamil Nadu flagged one establishment for operating without a trade licence.
10. An advertising complaint, dismissed: Zepto said it periodically receives communications from the Advertising Standards Council of India (ASCI). In one instance, a consumer alleged that promotional banners on the Zepto app misled users. ASCI concluded that the app adequately displayed the qualifying conditions and that the advertisement was not misleading.
11. Contested trademarks, including Zepto Pharmacy: Zepto disclosed that applications to register the trademarks “Zepto Pharmacy”, “Zepto Café”, and “Zepto Atom” remain pending. Among its private-label brand applications, 34 have been opposed and 14 have received objections.
12. Market data from a paid-for report: Zepto disclosed that the industry figures cited in the filing are drawn from a Redseer report that it exclusively commissioned and paid for. The company noted that the report’s estimates and methodology are subject to inherent limitations.
The financials: Zepto has not reported a profit since its launch in July 2021. Key numbers from the filing include:
- Revenue from operations: Rs 22,623.6 crore in FY26, more than double the Rs 11,109.9 crore in FY25.
- Full-year loss: Rs 5,905.2 crore in FY26, widening from Rs 4,699.7 crore in FY25 and Rs 1,214.8 crore in FY24.
- Scale: 1,139 dark stores across 66 cities and 47.97 million annual transacting users, as of March 31, 2026.
Zepto will use the fresh issue proceeds for:
- New dark stores: Rs 1,629 crore.
- Lease rentals for existing dark stores: Rs 1,734.9 crore.
- Technology and cloud infrastructure: Rs 1,324.8 crore.
- Marketing for ZMPL: Rs 520 crore.
- A portion of the proceeds for unidentified acquisitions and general corporate purposes.
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