India’s quick-commerce boom is moving at breakneck speed, but mounting cash losses are raising concerns about how long the momentum can last. As Zepto prepares for its initial public offering (IPO), investors are taking a closer look at the cost of rapid expansion and whether the sector’s growth is being propped up by funding rather than profits.
Zepto has scaled up aggressively over the past few years, building a dense network of dark stores to deliver groceries in under 10 minutes. As of September 2025, the company operated more than 900 dark stores and recorded gross sales of around $3 billion (about ₹26,000 crore).
Revenue growth has been sharp. Zepto reported revenue of ₹9,669 crore in FY25, up 129% year-on-year. However, this expansion has come with heavy losses. Net losses nearly tripled to ₹3,367 crore in FY25 from ₹1,214 crore a year earlier. During the same period, the company burned roughly ₹1,000–1,100 crore in cash, underlining how expensive speed has become in quick commerce.
Despite rising losses, Zepto is not short on funds (at least for now). As of late November 2025, the company held around ₹7,000 crore in cash reserves, with net cash estimated at about US$900 million. The proposed IPO is expected to further strengthen its balance sheet, effectively buying time to refine operations and move closer to profitability.
However, Zepto’s cash buffer is smaller compared to key rivals. Eternal (which owns Blinkit) and Swiggy reportedly held ₹17,000–18,000 crore each in cash around the same time, giving them greater room to absorb losses in an increasingly competitive market.
India’s quick-commerce space has become one of the most crowded consumer internet segments. New launches and expansions by large players, including Amazon’s rapid-delivery push and Flipkart’s entry, have intensified price competition. Heavy spending on discounts, logistics, and micro-fulfilment centres continues to pressure margins across the industry.
While the market is expected to grow sharply over the medium term, profitability remains elusive. The business model depends on high order volumes, tight cost control, and repeat customers, which will take time to stabilise.
The reliance on continuous fundraising to sustain losses has led to bubble concerns. With public markets less forgiving than private investors, the next few years will be crucial. For Zepto and its peers, the challenge is clear: convert rapid growth into sustainable profits before cash burn erodes investor confidence.
Zepto’s IPO marks a key moment for India’s quick-commerce sector. While strong growth and ample cash reserves provide short-term comfort, rising cash burn highlights the risks beneath the surface. Whether the industry can slow the burn without slowing growth will determine if today’s boom becomes a lasting business.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Dec 31, 2025, 12:59 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
