Motilal Oswal Financial Services Ltd (MOFSL) has injected a substantial ₹400 crore into quick commerce unicorn Zepto, purchasing 7.54 crore compulsorily convertible preference shares (CCPS), according to Zepto’s regulatory filing dated August 12.
Key Details
- Investment Purpose: The deal, entirely in cash, was made from MOFSL’s treasury portfolio, indicating a long-term strategic bet rather than a short-term play.Outlook Business
- Context: This move furthers Zepto’s push to boost domestic ownership ahead of its IPO. Other recent domestic investors include MapmyIndia (₹25 crore) and Elcid Investments (₹7.5 crore).
- Valuation & Round Details: According to ET Now, this investment is part of a larger ₹1,000 crore round—₹400 crore from MOFSL and the remaining ₹600 crore expected from other domestic investors. The implied valuation of Zepto is approximately USD 5.4 billion (~₹47,298 crore)
Background & Strategy
- Boosting Indian Stake: Zepto has been actively reducing foreign ownership and increasing domestic participation. In May, its founders, Motilal Oswal and Raamdeo Agrawal, individually invested $50 million (₹425 crore) each via secondary share purchases.
- IPO Aspirations: With the IPO possibly slated for 2026, increasing Indian ownership aligns with regulatory comfort and investor sentiment.
- Company Performance: Zepto’s FY24 revenue nearly doubled to ₹4,454.52 crore from ₹2,024 crore in FY23, underlining rapid growth.
Why It Matters
- Strategic Timing: Investing through CCPS presents convertible upside while helping balance Zepto’s ownership structure as it gears up for public markets.
- Investor Confidence: MOFSL’s substantial commitment from its own portfolio reflects strong faith in Zepto’s quick-commerce model and financial potential.
- Sector Momentum: This follows a wave of domestic investor interest in Zepto, signaling the startup ecosystem’s shift toward strong local backing.
Summary Table
| Aspect | Details |
|---|---|
| Investor | Motilal Oswal Financial Services Ltd (MOFSL) |
| Amount Invested | ₹400 crore |
| Instrument | 7.54 crore CCPS; all-cash deal |
| Part of Funding Round | ₹1,000 crore total round (₹400 crore from MOFSL, ₹600 crore expected from others) |
| Implied Valuation | USD 5.4 billion (~₹47,298 crore) |
| Strategic Purpose | To raise domestic shareholding ahead of IPO |