Zepto, the quick-commerce unicorn that’s been making waves in the grocery delivery sector, has now got the go-ahead from the National Company Law Tribunal (NCLT) to relocate its domicile from Singapore back to India. This decision is a big deal for Kiranakart Technologies, the Mumbai-based company behind Zepto, especially as it eyes an initial public offering (IPO) in 2025.
The Mumbai bench of the NCLT approved the cross-border merger between Kiranakart Technologies in India and its Singapore counterpart, Kiranakart Pte Ltd, on 9 January 2025. This approval not only simplifies Zepto’s corporate setup but also brings the company in line with Indian regulations.
Zepto’s NCLT Approval – Key Highlights
No Need for RBI’s NOC: The tribunal’s order specified that Zepto does not need to secure a no-objection certificate from the Reserve Bank of India for this merger. This is under Regulation 9 of the Cross-Border Merger Regulations, which essentially gives an automatic nod from the RBI.
Simpler Corporate Structure: The shift in domicile is designed to streamline Zepto’s corporate structure, cutting down on the number of legal entities. This restructuring will likely lead to quicker decision-making, better synergies, and a reduction in administrative overheads.
Boost for IPO Plans: This move positions Zepto favourably for its upcoming IPO. The company is gearing up to file draft IPO documents by March or April 2025, aiming to raise between USD 400 million to USD 500 million.
Zepto’s Domicile Shifting – Strategic Advantages of the Move
- Regulatory Synergy: Becoming an Indian entity means Zepto can operate more seamlessly within the local legal framework, reducing compliance risks and enhancing operational growth.
- Financial Efficiency: The merger means less duplication in administrative tasks and record-keeping, which translates to cost savings.
- Investor Attraction: A clearer, more straightforward corporate structure can make Zepto more appealing to investors both at home and abroad.
Since its inception in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has not only expanded rapidly but also seen its valuation soar to about USD 1.4 billion. It competes in the fast-paced quick-commerce industry alongside heavyweights like Swiggy Instamart and Zomato’s Blinkit.
The company’s recent pivot to a marketplace model from a B2B model shows its ambition to lead in the sector. With USD 1.35 billion from its latest funding rounds, Zepto is clearly on an aggressive expansion path.
Zepto isn’t the only one; other startups like PhonePe, Pine Labs, and Meesho have also brought their operations back to India. This trend underscores a shift where Indian startups find it advantageous to base themselves locally for easier regulatory navigation and to tap into the domestic investment pool.
Looking Forward
After Zepto receives NCLT approval, IPO preparations are in full swing. the company has already brought on board investment bankers like Goldman Sachs, Morgan Stanley, and Axis Capital. A crucial board meeting is scheduled for 19 January 2025, to hammer out the final details of the IPO.
The formal completion of this domicile shift is expected within 30 days from the approval, which not only strengthens Zepto’s operational base but also sets it up as a formidable player in the Indian stock market, ready to challenge its rivals.
Conclusion
The NCLT approval for Zepto to shift to India isn’t just about meeting regulatory requirements; it’s a strategic move that aligns the company with India’s market dynamics. By simplifying its structure and syncing with local policies, Zepto is well-positioned for growth, investor attraction, and leadership in quick-commerce. For investors and stakeholders, this move paints a promising picture of Zepto’s future as it steps into a phase of broader market participation.
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