Zepto Secures NCLT Approval for Reverse Flip to India, Poised for IPO

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Zepto, the Mumbai-based quick commerce startup, has secured approval from the National Company Law Tribunal (NCLT) for its merger with its Singapore-based affiliate, Kiranakart Pte Ltd. This decision allows Zepto to officially reverse flip its holding company to India, effectively streamlining its operations. The NCLT’s order marks a significant step in Zepto’s business transformation, as the company aims to optimize its legal structure and align with India’s regulatory environment. As part of this shift, Zepto plans to go public with an initial public offering (IPO) later this year. The decision has received approval from both Indian and Singaporean authorities, signaling confidence in Zepto’s future prospects.

Zepto Working Model and Revenue Streams NCLT

Zepto operates as a quick commerce platform, offering ultra-fast delivery services for everyday grocery items. The company’s model is rooted in the business-to-business (B2B) structure.Zepto’s hyperlocal delivery model, offering groceries in 10 minutes, has grown popular, especially during the pandemic. This has helped it outpace competitors like Blinkit and Swiggy Instamart in revenue and market share.

Funding Background and Founders

Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto has quickly established itself as a significant player in the quick commerce market. Both founders come from engineering backgrounds and have previously worked in the tech and e-commerce sectors. Before founding Zepto, Palicha and Vohra gained valuable insights into the startup ecosystem, leveraging their expertise to build a platform capable of handling large-scale operations.

Zepto has garnered significant investor interest, raising over $1.3 billion in funding, and is currently valued at around $1.4 billion. The startup has attracted top-tier investors like Nexus Ventures, which has supported its rapid growth and expansion. The company’s funding has been key in scaling operations, expanding products, and improving its logistics and technology.

Services Offered by Zepto

Zepto’s core offering is its hyperlocal delivery service, which aims to deliver groceries within minutes. It caters to urban dwellers who need groceries delivered quickly without compromising on quality. Zepto’s user-friendly mobile app allows customers to browse a wide range of products, including fresh produce, dairy, snacks, beverages, and personal care items.

The company’s logistics operations are optimized to ensure that goods are delivered as quickly as possible.

Merger and Reverse Flip: Key Highlights

The NCLT approved the merger of Kiranakart Technologies (Zepto’s Indian arm) and Kiranakart Pte Ltd (its Singapore parent) in January 2025. The move, known as a “reverse flip,” involves the transfer of the holding company’s base to India. This restructuring aims to optimize the company’s legal entity structure for better business synergies, cost savings, and decision-making efficiency.

The reverse flip eliminates the need for a No-Objection Certificate (NOC) from the RBI, as per the NCLT decision.

The NCLT order further emphasizes that this merger is beneficial for addressing regulatory complexities, competitive risks, and operational inefficiencies.

Zepto IPO Plans and Market Strategy In NCLT

With the approval of its reverse flip, Zepto is now positioned to pursue its IPO plans more effectively. Zepto plans to file its IPO papers in March or April 2025, aiming to attract both Indian and global investors while aligning with local regulations.. By simplifying its legal structure, the company expects to reduce operational complexities, lower compliance costs, and streamline its fundraising efforts.

Regulatory Approval and Strategic Benefits

The decision to reverse flip Zepto a holding company has received approval from both the Indian NCLT and Singaporean authorities. This highlights the smooth cooperation between regulatory bodies and reinforces Zepto’s global ambitions. The tribunal confirmed the merger is legally sound, providing Zepto with better regulatory alignment, improved management, and enhanced competitiveness.

The Road Ahead: Future of Zepto and Its Competitors

Zepto’s reverse flip to India sets it up for rapid growth and a successful IPO, joining unicorns like Razorpay and Groww. By streamlining operations and improving regulatory compliance, Zepto is positioning itself for success, though it will face stiff competition from players like Swiggy Instamart, Blinkit, and BigBasket.

Learning for Startups and Entrepreneurs

The case of Zepto’s reverse flip offers several key takeaways for startups and entrepreneurs, especially those in fast-growing sectors like quick commerce and technology.

• Streamline Operations: Zepto’s decision to simplify its legal structure highlights the importance of operational efficiency. Startups can benefit from reducing administrative burdens and focusing on scaling their core business.
• Regulatory Compliance: Aligning with local regulations can smoothen the process of fundraising and improve investor confidence. Startups should always stay informed about changing regulatory landscapes.
• IPO Strategy: As demonstrated by Zepto, preparing for an IPO requires a well-thought-out legal structure, operational efficiency, and strong investor backing.

Conclusion

Zepto’s NCLT approval for its reverse flip to India is a key step in its growth, as it prepares for an IPO. This move aligns with local regulations, streamlines operations, and sets Zepto up for long-term success in the Indian market and beyond.

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