AICPDF Urges Sebi to Pause IPOs of Loss-Making Quick-Commerce Companies

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Distributors Body Seeks Regulatory Action Amid Ongoing Competition Proceedings​

The All India Consumer Products Distributors Federation has urged the market regulator to pause initial public offerings of loss-making quick-commerce and closely related e-commerce companies, citing concerns over investor protection and the impact on India’s retail trade ecosystem.

In a representation submitted to the Securities and Exchange Board of India, the federation called for immediate measures, including a temporary pause on IPO approvals, until ongoing proceedings before the Competition Commission of India are conclusively resolved.

Concerns Over Loss-Making Business Models​

The All India Consumer Products Distributors Federation stated that several quick-commerce companies continue to operate with large cumulative losses, negative operating cash flows, and unproven unit-level profitability. According to the federation, these business models are sustained primarily through repeated infusions of private capital.

It said such capital is used to fund consumer subsidies, discounts, and capital-intensive investments in dark-store and logistics infrastructure. Despite the absence of demonstrated profitability, valuations are often built on gross merchandise value and market share rather than earnings or free cash flow.

Reference to Recent Sector Listings​

The federation referred to recent listings in the sector by Zomato and Swiggy. It stated that both companies listed after years of sustained losses, with IPO structures that allowed significant exits by early shareholders.

According to AICPDF, large venture and institutional investors monetised their stakes either at the time of listing or through post-listing sales, while the companies continued to report substantial losses and negative operating cash flows.

Ongoing Competition Proceedings Flagged​

AICPDF said it has already filed formal complaints before the Competition Commission of India, alleging predatory pricing and anti-competitive conduct by quick-commerce platforms. These proceedings remain active and unresolved, with the competition regulator having sought additional evidence.

The federation cautioned that proceeding with IPO approvals while competition law investigations are ongoing raises concerns regarding material disclosure, regulatory arbitrage, and investor protection.

Impact on Kirana and Retail Ecosystem​

The distributors body, which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets across India, stated that predatory pricing funded through investor capital is affecting the livelihoods of small retailers.

It said India’s capital markets should not become exit routes for business models that are structurally loss-making and sustained only through continuous cash burn. According to the federation, when early investors exit through IPOs while losses persist, the associated risk is transferred to small retail investors.

Call for Sebi Intervention​

Dhairyashil Patil, National President of the All India Consumer Products Distributors Federation, said the regulator has a responsibility to ensure transparency, fairness, and investor protection.

He urged Sebi to intervene before further impact is caused to investors and India’s retail trade ecosystem.