Raamdeo Agrawal Slams Zepto IPO Delay: Why Valuation Concerns Make Tapping Public Market Premature

Raamdeo Agrawal Slams Zepto IPO Delay: Why Valuation Concerns Make Tapping Public Market Premature​

Market veteran and investor in Zepto, Raamdeo Agrawal, has strongly criticized the quick-commerce company's decision to delay its proposed Initial Public Offering (IPO). Agrawal views the postponement as a sign that Zepto needs to reassess its valuation strategy amidst intense market scrutiny.

The decision follows discussions where Zepto agreed with major shareholders to close a pre-IPO equity funding round, instead of moving forward with the planned public debut. The move comes after significant concerns arose regarding the IPO's potential valuation range.

Valuation Disconnect and Public Market Reality Check​

Agrawal stated in an interview with The Economic Times that the delay sends a clear message: companies should refrain from entering the public market until they are genuinely profitable or possess a highly visible path to profitability.

The veteran emphasized the fundamental difference between private funding rounds and public markets. He pointed out that while large private investors can appreciate high-growth stages involving acquisitions and resulting losses, the public market demands tangible earnings.

Public stock exchanges prioritize quarterly reporting of profits. Agrawal noted that mutual fund investors must mark their portfolios daily and may be hesitant to invest at a valuation level that risks an immediate mark-to-market loss. He concluded that it was likely "a little premature" for the company to go public at that scale.

Inside the Zepto IPO and Market Perception​

The quick-commerce sector, driven by rapid grocery orders and heavy investments in dark stores, remains one of India's most intensely watched consumer internet themes. However, the intense growth trajectory is now facing skepticism from public market investors regarding the true cost of expansion.

Zepto’s updated prospectus indicates that its IPO will involve a fresh issue of shares worth Rs 8,010 crore. This is coupled with an offer-for-sale (OFS) component comprising nearly 11.35 crore shares by existing shareholders.

The five-year-old company first filed its confidential IPO papers with the SEBI regulator in December 2025 and received regulatory approval earlier this year in May. The proposed valuation discrepancy is stark, as the potential public listing valuation was reportedly around $2.5-$3 billion, significantly below the $7 billion achieved during a private round led by US-based pension fund Calpers in October 2025.

Agrawal’s View on Equity Returns and Corporate Profitability​

While critiquing Zepto's timing, Agrawal maintained an encouraging outlook for the long-term performance of Indian equities. He expects the overall index to deliver between 12-14% over the next five years.

This projection is based on expected economic growth in India at 7.5-8.5%, with corporate profits projected to expand by 13-14%. This optimism comes despite the current turbulence faced by high-growth, unprofitable businesses like Zepto.

Agrawal expressed his personal disappointment regarding the challenges facing any entrepreneur, stating that while he wishes no company should endure this pain, "his investment is a failure will be decided after 10 years, not now."