Zepto IPO: Investors Push Back on Valuation
Zepto’s much-awaited IPO has hit a valuation roadblock, with top domestic mutual funds reportedly seeking a deeper valuation cut before committing to the issue.
According to The Economic Times, several large asset managers told Zepto representatives that they were not comfortable subscribing even at the lower valuation being considered by the company. Zepto had reportedly been considering an IPO valuation of around $4-5 billion, significantly below its previous private-market valuation of $7 billion in October 2025.
The development highlights a broader shift in how public-market investors are evaluating high-growth, loss-making startups.
From $7 Billion to a Lower IPO Valuation
Zepto reached a $7 billion valuation after raising $450 million in October 2025, with US pension fund CalPERS among the investors.
However, the valuation expectations changed significantly as Zepto approached the public markets. Earlier reports indicated that investors were discussing valuations in the $3.5-4 billion range, while some domestic investors were reportedly assigning an even lower value.
The difference between private-market valuation and what public-market investors are willing to pay has therefore become one of the biggest challenges for Zepto’s IPO.
This is important because an IPO valuation ultimately has to be supported not just by growth expectations, but also by factors such as cash burn, profitability, competitive intensity and the ability to generate sustainable returns.
