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Zepto, the Bangalore-based online grocery startup, is negotiating a $250 million secondary sale, allowing existing shareholders to offload equity in preparation for an initial public offering (IPO) later this year or in early 2026. The move is aimed at increasing the ownership stake of Indian investors in the company before it goes public.
Private equity arms from Motilal Oswal Financial Services Ltd. and Edelweiss Financial Services Ltd. are currently in talks with Zepto to purchase these shares, according to anonymous sources familiar with the negotiations. According to Bloomberg, the deal will not involve any new capital raised by Zepto, but instead, will offer employees and current investors the opportunity to cash out.
The secondary sale is expected to occur at a valuation of approximately $5 billion, which mirrors Zepto's valuation from its most recent funding round held late last year. The purpose of this transaction is to boost the proportion of shares held by Indian investors, with the company targeting an increase in their stake from the current 33% to around 50%.
Founders Aadit Palicha and Kaivalya Vohra hold about 20% of the company, while the rest of the equity is distributed among investors and employees. This strategy is part of Zepto’s broader goal of strengthening its Indian investor base ahead of its anticipated public listing.
While both Zepto and Motilal Oswal have not responded to requests for comment, Edelweiss declined to provide any feedback.
Secondary stock sales, which allow employees and investors to liquidate shares before an IPO, have previously been a subject of debate. Critics argue that such sales may reduce the motivation of stakeholders to build the business. However, in recent years, they have gained traction as a method to reward employees and provide liquidity for investors, while also fostering morale within the company.
