Zepto IPO DRHP Reveals User Base Falls for First Time in March 2026 as Marketing Costs Surge to Rs 1,389 Crore in FY26

Zepto, India’s fast-growing quick commerce unicorn, revealed in its Updated Draft Red Herring Prospectus (UDRHP) filed with SEBI on June 8, 2026 that its user base recorded a sequential decline in March 2026, marking the first month-on-month dip in monthly active users since the company’s rapid expansion phase. This has come despite the company spending Rs 1,389 crore on advertising and promotional activities in FY26, signalling that the cost of customer acquisition in the highly competitive Zepto IPO sector is rising faster than organic user growth. While annual transacting users grew 25% year on year to 4.79 crore as of March 31, 2026, the sequential monthly dip raises questions about user churn and the sustainability of the growth trajectory ahead of Zepto’s planned Zepto IPO targeting July 2026 listing. Intense competition from Blinkit (Eternal) and Instamart (Swiggy), both of which ran aggressive promotions in Q4 FY26, is cited as the primary factor.

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Zepto IPO: FY26 Financial Performance

Metric	FY26	FY25	Change
Revenue from Operations	Rs 22,623.58 crore	Rs 11,109.94 crore	+103.63% YoY
Net Loss	Rs 5,905.19 crore	Rs 4,699.71 crore	Widened by Rs 1,205 crore
Q4 FY26 Revenue	Rs 7,497.64 crore	Rs 4,278.06 crore	+75.26% YoY
Q4 FY26 Net Loss	Rs 1,538.67 crore	Rs 1,831.91 crore	Narrowed by Rs 293 crore
Total Expenses	Rs 29,026.70 crore	~Rs 15,800 crore (est.)	+84% YoY
Advertising and Promotional Spend	Rs 1,389 crore	~Rs 700-800 crore (est.)	+75-100% YoY
Employee Costs	Rs 1,785 crore	~Rs 1,240 crore	+44% YoY
Delivery and Handling Costs	Surged 90%+	N/A	Rapid fulfilment expansion

Zepto IPO: Operating Metrics

Operating Metric	Q4 FY26	Q4 FY25	Growth
Annual Transacting Users (ATU, March 31 2026)	4.79 crore	3.83 crore (est.)	+25% YoY
Total Orders (Q4 FY26)	210 million	~130 million (est.)	+60% YoY
Daily Orders	23.3 lakh (2.33 million)	~14.2 lakh	+64% YoY
Dark Stores	1,139	~750	Up 52% YoY
Cities	66	~40	Expanded significantly
Orders per Store per Day	2,140	1,425	+50%
Net Receivable Value (FY26)	Rs 24,815.5 crore	Rs 5,231.7 crore (FY24)	4.7x in 2 years

User Base Decline in March: What the Data Shows

The Zepto IPO DRHP data reveals an important nuance: while annual transacting users (ATU) grew 25% YoY to 4.79 crore, the month-on-month user count in March 2026 showed a sequential decline for the first time. This divergence between annual and monthly metrics is significant because it reveals that existing users are transacting more frequently (contributing to the ATU growth) while the absolute base of monthly active users may be contracting or churning. The decline in March coincides with Blinkit running heavily subsidised offers and Swiggy Instamart expanding its dark store count aggressively, suggesting competitive intensity is the primary factor rather than structural demand weakness. Zepto processed 23.3 lakh orders per day in Q4 FY26, up 64% YoY, so total volumes remain robust even if the user base metric is under pressure.

Rs 1,389 Crore Marketing Spend: Value or Wastage?

The Zepto IPO filing shows advertising and promotional spend reached Rs 1,389 crore in FY26, representing approximately 6.1% of revenues. This is significantly higher than what mature e-commerce platforms spend on marketing as a percentage of revenues (typically 3-4%). For context, Zepto’s marketing spend in FY26 alone is larger than many listed mid-cap companies’ total revenues. The elevated marketing spend reflects the land-grab phase of quick commerce in India, where all three players (Blinkit, Instamart, Zepto) are subsidising customer acquisition to build habit and loyalty. The question for Zepto IPO investors is whether this spending translates into durable, loyal users or whether the platform needs to maintain this burn rate indefinitely to defend its user base.

ED Summons to Founders: A Key IPO Risk

The Zepto IPO UDRHP disclosed as Risk Factor 29 that the Enforcement Directorate (ED) issued summons to co-founders Aadit Palicha and Kaivalya Vohra on April 8, 2026, under the Foreign Exchange Management Act (FEMA). The summons required the founders to produce documents related to foreign investments, shareholding patterns, and the company’s business model. This is a material disclosure that Zepto IPO investors must carefully evaluate, as unresolved regulatory proceedings can create uncertainty post-listing. Both founders are retaining their entire 18.47% combined stake in the IPO, which analysts view as a confidence signal.

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Conclusion

The Zepto IPO filing reveals a company that has achieved remarkable scale (Rs 22,624 crore revenue, 2.33 million orders/day, 1,139 dark stores) but faces three critical concerns ahead of listing: the first-ever monthly user decline in March despite Rs 1,389 crore in marketing spend, widening annual losses to Rs 5,905 crore, and the ED FEMA investigation of its founders. Track listed quick commerce players Eternal (NSE: ETERNAL) and Swiggy (NSE: SWIGGY) on Univest while monitoring Zepto IPO developments ahead of its July 2026 listing target. Consult a SEBI-registered advisor before investing.

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Frequently Asked Questions

What does the Zepto IPO DRHP reveal about its user base in March 2026?

Ans. The Zepto IPO Updated DRHP filed with SEBI on June 8, 2026 shows that Zepto’s annual transacting users grew 25% year on year to 4.79 crore as of March 31, 2026. However, sequential (quarter-on-quarter) data shows that the monthly active user count in March 2026 declined for the first time, reflecting the impact of intense competition from Blinkit (Eternal/Zomato) and Instamart (Swiggy), which ran aggressive promotions in Q4 FY26. This dip in monthly active users is notable given that Zepto spent Rs 1,389 crore on advertising and promotional activities in FY26, representing one of its largest cost heads.

What is the Zepto IPO size and structure?

Ans. The Zepto IPO consists of a fresh issue of Rs 8,010 crore and an offer-for-sale (OFS) of 11.35 crore equity shares by existing investors including Nexus Ventures VI Holdings, Nexus Ventures VII Holdings, Razor Ventures Zepto LLC, Contrary ZEP Holdings, Kaiser Permanente Group Trust, and Kaiser Foundation Hospitals. The total IPO size is estimated at approximately Rs 10,000-11,000 crore. Promoters and co-founders Aadit Palicha and Kaivalya Vohra are retaining their entire 18.47% collective stake. Zepto plans to use IPO proceeds primarily to expand its dark store network from 1,139 to approximately 1,904 stores.

What are the key risks in the Zepto IPO?

Ans. The key risks in the Zepto IPO are: first, widening net losses of Rs 5,905 crore in FY26 despite 103% revenue growth; second, the Enforcement Directorate issued summons to co-founders Aadit Palicha and Kaivalya Vohra on April 8, 2026, under FEMA (Foreign Exchange Management Act) for documents related to foreign investments and shareholding patterns; third, intense competition from Blinkit (Eternal, backed by Zomato) and Instamart (Swiggy) which have deeper capital resources; fourth, high cash burn with delivery and handling costs surging over 90%; fifth, an auditor transition in March 2024 (from Ruthala and Co. to S.R. Batliboi, EY network) ahead of the IPO.

How does Zepto compare with listed quick commerce rivals Eternal and Swiggy?

Ans. Zepto will directly compete with listed peers upon listing. Eternal (Zomato, NSE: ETERNAL) owns Blinkit, the market leader in quick commerce with approximately 20 million monthly active users vs Zepto’s 13 million MAU at peak. Swiggy (NSE: SWIGGY) operates Instamart. Zepto’s revenue of Rs 22,624 crore in FY26 represents strong growth but it remains loss-making with losses of Rs 5,905 crore. The quick commerce sector as a whole is not yet profitable in India, and Zepto’s path to profitability will depend on achieving store-level EBITDA positivity across a majority of its 1,139 dark stores.