Zepto (Kiranakart Technologies Private Limited) - Detailed IPO Analysis Report

Section 02

At a Glance

Issue Size & Market Cap

Fresh issue of Rs 8,010.00 cr (Rs 80,100 million) and OFS of up to 113,466,566 shares; post-issue market cap is [●] (not yet determined).

The price band is not yet determined, so the OFS value and post-issue market cap are represented as [●]. (UDRHP-I, p.64)

Fresh vs OFS Split

Fresh issue: Rs 8,010.00 cr; OFS: 113,466,566 shares.

The split in terms of rupees is not yet determined as the price band is represented as [●]. (UDRHP-I, p.64)

Profitability Trajectory

Loss-making.

In FY26, the company incurred a restated consolidated loss of Rs 5,905.19 cr (Rs 59,051.92 million), following losses of Rs 4,699.71 cr in FY25 and Rs 1,214.79 cr in FY24. (UDRHP-I, p.75)

Top Headline Risk Flags

Yes, history of significant losses (Rs 5,905.19 cr in FY26) and negative cash flows from operations (-Rs 3,462.44 cr in FY26).

Risk Factors 1 & 2 highlight that the company has incurred losses and has had negative cash flows since inception. (UDRHP-I, p.27, 28)

Auditor Opinion

Yes, qualified opinion on internal financial controls (IFCoFR) for FY25 and FY26, and modifications on books of account regarding audit trail.

S.R. Batliboi & Associates LLP qualified internal controls due to lack of appropriate IT general controls (access, change, and operations management). (UDRHP-I, p.326-327)

Promoter Integrity & Litigation

Yes, Minimum Wages Act criminal complaint against promoter Kaivalya Vohra (stayed by Karnataka HC). Summons from ED requesting info.

No SEBI/RBI disciplinary actions have been taken against promoters in the last five years. Summons from ED were issued to Aadit Palicha and Kaivalya Vohra. (UDRHP-I, p.586, 588, 590)

IPO P/E vs Peers

IPO P/E: [●] (not yet determined); Peer P/E: 635.05 for Eternal (Zomato) and NA for Swiggy (due to losses).

The price band is not yet determined, so the IPO P/E cannot be calculated. Zomato (Eternal) diluted P/E is 635.05. (UDRHP-I, p.161, 181)

Use of Fresh Proceeds

Yes, growth-oriented.

Proceeds are used for setting up 1,904 new dark stores (Rs 1,628.98 cr), technology and cloud (Rs 1,324.78 cr), marketing in subsidiary (Rs 520.00 cr), and lease rentals of existing stores (Rs 1,734.94 cr). No debt repayment. (UDRHP-I, p.144)

Section 03

What The Company Does

Zepto is a leading quick commerce platform in India that offers 10-minute delivery of groceries, fresh foods, and daily essentials. It operates through a dense network of local dark stores (1,139 stores as of March 31, 2026) and offers B2B trading, last-mile logistics, and platform advertising services to merchant partners and brands.

#	Checkpoint	Finding	Status	Page Ref
1	What does the company do, in one plain sentence? + Where to find: Cover, 'Our Business', Industry Overview Why it matters: If you can't say it simply, neither can the company - and that's telling. Benchmark: Unexplainable model = step back	Zepto operates an online quick commerce marketplace platform providing 10-minute doorstep delivery of groceries, fresh produce, and daily essentials.	OK	Our Business, p.232
2	Operating history & year of incorporation + Where to find: 'History and Corporate Matters' Why it matters: A long, consistent track record beats a recently assembled roll-up. Benchmark: <3 yrs real operating history = caution	Originally incorporated as Kiranakart Technologies Private Limited on Dec 5, 2020 (commenced operations in Dec 2020). Changed name to Zepto Private Limited on Apr 16, 2025, and converted to public company Zepto Limited on Dec 8, 2025.	OK	History and Corporate Matters, p.283
3	Industry / sub-sector & position in the value chain + Where to find: 'Industry Overview' Why it matters: Defines the correct peer set and the normal margin/return profile. Benchmark: -	Quick Commerce (e-retail). Operates as a downstream aggregator and marketplace platform connecting B2B suppliers, local dark store operators, delivery partners, and retail end-consumers.	OK	Industry Overview, p.189
4	Stated competitive strengths - real or generic? + Where to find: 'Our Strengths' Why it matters: 'Experienced promoters, quality focus' is boilerplate; specifics are real moats. Benchmark: Only generic strengths = weak moat	Strengths include: (1) Densification flywheel reducing delivery distances and times; (2) Data flywheel enhancing product assortment/availability through micro-market trends; (3) Operational excellence (in-house WMS/tech, Lean/Six Sigma).	OK	Our Business, p.251-253
5	Stated growth strategy - concrete or aspirational? + Where to find: 'Our Strategies' Why it matters: Fundable, specific plans beat vague ambition. Benchmark: Vague strategy = discount the story	Strategies include: (1) Rapid growth of order volume/user base/NRV while optimizing Cost per Order (via densification and dark store efficiency); (2) Everyday Low Price (EDLP) platform philosophy to drive user retention; (3) Margin expansion via ad revenue and new categories.	OK	Our Business, p.263-267
6	Industry tailwinds vs headwinds + Where to find: 'Industry Overview', MD&A Why it matters: Structural growth vs a flat/declining or cyclical-peak market. Benchmark: Declining/flat industry = headwind	Tailwinds: Rapid expansion of Indian quick commerce (projected to grow 5-7x between CY25 and CY30 to reach ₹5.1-7.1 trillion); rising digital payments and smartphone penetration. Headwinds: Intensifying competition from new and existing players.	OK	Industry Overview, p.193, 202
7	Who commissioned the industry report? + Where to find: 'Industry Overview' footnotes Why it matters: Company-paid reports (e.g. CRISIL/F&S) skew optimistic - discount accordingly. Benchmark: Always company-commissioned	The report titled 'India's Quick-Commerce Industry: Market Structure and Growth Drivers' (dated May 30, 2026) was prepared by Redseer Strategy Consultants Private Limited, which was commissioned and paid for by Zepto Limited.	Watch	Industry Overview, p.189
8	Is the TAM / market-size claim credible? + Where to find: 'Industry Overview' Why it matters: Sanity-check the addressable market against the company's actual revenue. Benchmark: Implausibly large TAM = puffery	TAM claim: Indian retail market valued at ~₹91 trillion in CY25, quick commerce GMV at ~₹963 billion (CY25). Quick commerce projected to grow to ₹5.1-7.1 trillion by CY30. Claims are credible given low current penetration (~1%).	OK	Industry Overview, p.190, 198
9	Market share and its trend + Where to find: Industry / Business Why it matters: Share gains signal real competitiveness; losses signal pressure. Benchmark: Losing share = flag	Zepto is described as the fastest-growing quick commerce platform in terms of orders placed, with a 119.5% order volume CAGR over FY24-FY26. It has achieved the highest increase in share of total orders among scaled peers (GMV >$1B).	OK	Industry Overview, p.215-216
10	Key competitors named + Where to find: 'Competition', Basis for Offer Price Why it matters: Tells you the genuine peer set for the valuation comparison later. Benchmark: -	Key listed and unlisted competitors are Blinkit (operated by peer Eternal Limited) and Instamart (operated by peer Swiggy Limited). New competitors include Amazon Now and Flipkart Minutes.	OK	Industry Overview, p.215

Section 04

The IPO Itself

Zepto is raising Rs 8,010.00 cr through a fresh issue of shares, alongside an OFS of up to 113,466,566 shares by selling shareholders. Only PE and institutional investors (like Nexus Ventures and Kaiser Foundation) are selling; the promoters are not selling. The fresh proceeds are growth-oriented, earmarked for setting up 1,904 new dark stores (Rs 1,628.98 cr), technology (Rs 1,324.78 cr), marketing (Rs 520.00 cr), and lease rentals of existing stores (Rs 1,734.94 cr).

#	Checkpoint	Finding	Status	Page Ref
11	Mainboard or SME issue? + Where to find: Cover page Why it matters: SME = thinner disclosure, lower liquidity, higher risk. Benchmark: SME = extra caution	Mainboard issue (listed on BSE and NSE).	OK	Cover page
12	Total issue size (Rs cr) + Where to find: Cover page / 'The Offer' Why it matters: Basic sizing of the raise. Benchmark: -	Fresh issue of ₹8,010.00 cr (₹80,100 million) and an Offer for Sale (OFS) of up to 113,466,566 equity shares. Total issue size in ₹ is not finalized as the price band is represented as [●].	OK	The Offer, p.64
13	Fresh issue amount (Rs cr) + Where to find: 'The Offer' Why it matters: Only the fresh issue brings new money into the company. Benchmark: -	₹8,010.00 cr (₹80,100 million) fresh issue.	OK	The Offer, p.64
14	OFS amount (Rs cr) + Where to find: 'The Offer' Why it matters: OFS proceeds go to selling shareholders, not the business. Benchmark: -	OFS of up to 113,466,566 equity shares. Value in ₹ is represented as [●] as the price band is not yet determined.	OK	The Offer, p.64
15	Fresh : OFS ratio + Where to find: 'The Offer' Why it matters: A heavy OFS tilt means the IPO is mostly an exit. Benchmark: OFS >70% + tiny fresh = flag	Fresh issue of ₹8,010.00 cr vs OFS of 113,466,566 shares. Split in ₹ is represented as [●] due to price band not being determined, but it is heavily tilted towards Fresh Issue.	OK	The Offer, p.64
16	Who is selling in the OFS? + Where to find: 'The Offer' / Selling Shareholders Why it matters: Promoter exit and PE exit carry very different signals. Benchmark: Large promoter sell-down = flag	Selling shareholders are: Nexus Ventures VI Holdings LLC (57.36M shares), Nexus Ventures VII Holdings LLC (30.40M shares), Contrary ZEP Holdings LLC (7.80M shares), Razor Ventures Zepto LLC (9.36M shares), Kaiser Foundation Hospitals (4.39M shares), and Kaiser Permanente Group Trust (4.16M shares). No promoters are selling.	OK	The Offer, p.65
17	How much does the COMPANY actually receive? + Where to find: Fresh issue minus issue expenses Why it matters: This is the real fuel for growth - often far less than the headline. Benchmark: -	The company receives the Fresh Issue proceeds of ₹8,010.00 cr (₹80,100 million) minus Fresh Issue expenses. Net proceeds are represented as [●] in the DRHP as the price band and expenses are not finalized.	OK	Objects of the Offer, p.143
18	Objects: capex - amount & specificity + Where to find: 'Objects of the Offer' Why it matters: Specific, costed capex is genuine growth spending. Benchmark: Vague/uncosted capex = flag	₹1,628.98 cr (₹16,289.75 million) for expansion of the dark store network by setting up 1,904 new dark stores. Average capex is detailed from FY27 to FY30: ₹7.94M to ₹9.06M per store.	OK	Objects of the Offer, p.144, 147
19	Objects: debt repayment amount + Where to find: 'Objects of the Offer' Why it matters: Deleveraging is healthy but it is balance-sheet repair, not growth. Benchmark: High % to debt = repair, not growth	₹0.00 cr (Nil). The company has zero outstanding borrowings in FY26, so no proceeds are allocated to debt repayment.	OK	Objects of the Offer, p.144
20	Objects: working capital amount + Where to find: 'Objects of the Offer' Why it matters: Normal for a growing WC-intensive business; large amounts can signal a stretched cycle. Benchmark: -	₹0.00 cr (Nil) allocated directly as working capital in the specific objects, but working capital needs are funded through GCP.	OK	Objects of the Offer, p.144
21	Objects: acquisition - named target or 'future M&A'? + Where to find: 'Objects of the Offer' Why it matters: A named, costed target beats a blank cheque for 'inorganic growth'. Benchmark: Unspecified M&A = flag	Funding inorganic growth through 'unidentified acquisitions' and general corporate purposes (GCP) combined. Capped at 35% of gross proceeds. Unidentified acquisitions alone are capped at 10% of gross proceeds (₹801.00 cr). No target is named.	Watch	Objects of the Offer, p.143-144
22	General Corporate Purposes (GCP) as % of fresh issue + Where to find: 'Objects of the Offer' Why it matters: SEBI caps GCP (and unidentified objects). High GCP = undefined use of your money. Benchmark: Maxed-out / high GCP = flag	GCP is capped at 25% of gross proceeds (₹2,002.50 cr or ₹20,025 million). The remaining unallocated proceeds (₹2,801.30 cr or 34.97% of fresh issue) will go towards GCP and Inorganic Growth combined.	Watch	Objects of the Offer, p.144
23	Issue expenses as % of the issue + Where to find: 'Objects of the Offer' Why it matters: Fees eat into the proceeds that reach the company. Benchmark: Unusually high = flag	Represented as [●] in the DRHP, as the price band and expenses are not finalized.	OK	Objects of the Offer, p.143
24	Overall read: growth / debt-repair / exit / mixed? + Where to find: Synthesise the objects Why it matters: The single most important interpretation of the whole issue. Benchmark: Pure exit or repair = low enthusiasm	Growth-heavy: 43.1% of fresh issue goes directly to new dark store setup and technology/marketing (growth), while the remaining goes to lease rentals of existing stores (opex) and GCP/Inorganic growth (mixed). No debt repayment or promoter exit.	OK	Objects of the Offer, p.144
25	Pre-IPO placement done - at what price vs the IPO band? + Where to find: 'Capital Structure' Why it matters: A recent placement far below the IPO price signals aggressive pricing. Benchmark: Big gap below IPO price = flag	The company may consider a Pre-IPO Placement of up to ₹1,602.00 cr (20% of fresh issue) prior to RHP. Primary CCPS issuances in Oct/Nov 2025 were allotted at ₹37.74 per share (adjusted).	OK	Capital Structure, p.93, 180
26	WACA - weighted avg cost of acquisition of promoter/investor shares vs IPO price + Where to find: 'Basis for Offer Price' Why it matters: SEBI-mandated. Shows the markup at which insiders are selling to you. Benchmark: IPO price >> WACA = priced for insiders	WACA of primary issuances in the last 18 months is ₹37.74 per share. The IPO price band is represented as [●], so the markup cannot be determined yet.	OK	Basis for Offer Price, p.180-181

Section 05

Business Quality

Analysis of customer and supplier concentration, recurring revenue moats, capacity utilisation, and pricing power.

#	Checkpoint	Finding	Status	Page Ref
27	Revenue breakdown by segment / product + Where to find: 'Our Business', financials Why it matters: Reveals mix and hidden concentration. Benchmark: -	FY26 Revenue breakdown: (1) Sale of traded goods: ₹17,587.92 cr (77.7% of revenue); (2) Service revenue: ₹5,022.52 cr (22.2%), which includes Warehousing/last-mile charges (₹2,779.84 cr), Advertisements (₹1,635.73 cr), and Platform services (₹564.17 cr).	OK	Notes to Restated Financials, Note 18, p.377
28	Top customer as % of revenue + Where to find: 'Our Business', Risk Factors Why it matters: Single-customer dependency is a major fragility. Benchmark: Top-1 >25-30% = flag	Virtually 0% (negligible). Serving millions of retail end-consumers on an order-by-order basis.	OK	Notes to Restated Financials, Note 18, p.377
29	Top 5 customers as % of revenue + Where to find: 'Our Business', Risk Factors Why it matters: Customer concentration risk. Benchmark: Top-5 >50% = flag	Virtually 0% (negligible). No single customer or small group represents a material share of retail revenue.	OK	Notes to Restated Financials, Note 18, p.377
30	Are customer relationships recurring/contracted or order-by-order? + Where to find: 'Our Business' Why it matters: Recurring revenue is higher quality and more predictable. Benchmark: Purely transactional = lower quality	D2C retail relationships are order-by-order (transactional), supported by the 'Zepto Pass' loyalty program. B2B agreements are in place with platform licensees and merchant partners.	OK	Notes to Restated Financials, Note 18, p.377
31	Recurring / repeat revenue % + Where to find: 'Our Business', MD&A Why it matters: Predictability of the top line. Benchmark: -	Not explicitly disclosed as a percentage of revenue in the DRHP, but cohort retention data shows 45-50% transacting user retention after 12 quarters.	OK	Our Business, p.265
32	Supplier concentration (top / top-5) + Where to find: 'Our Business', Risk Factors Why it matters: Input dependency and weak bargaining power. Benchmark: High concentration = flag	Not disclosed in terms of exact percentages in the DRHP. The company uses non-exclusive contracts (typically 2-year term) for private labels to mitigate risk.	OK	Risk Factors, p.52
33	Single-source or single raw-material dependency? + Where to find: Risk Factors Why it matters: Exposure to a supply or price shock. Benchmark: Single source = flag	No single-source raw material dependency as the company operates a marketplace with a wide assortment of daily essentials sourced from multiple suppliers.	OK	Risk Factors, p.52
34	Manufacturing footprint - single-plant dependency? + Where to find: 'Our Business', Properties Why it matters: One plant concentrates operational and disaster risk. Benchmark: Single critical plant = flag	N/A. The company does not own manufacturing facilities (operates as a marketplace/logistics player), but depends on third-party contract manufacturers for private label products.	OK	Risk Factors, p.37, 52
35	Current capacity utilisation + Where to find: 'Our Business' Why it matters: Capex objects only make sense if existing capacity is already running hot. Benchmark: Low utilisation + big capex = question	N/A for manufacturing. However, dark store efficiency is tracked: throughput per dark store grew from 1,325 OPD in FY24 to 1,677 OPD in FY26 (and 2,140 OPD in Q4 FY26).	OK	Objects of the Offer, p.146
36	Geographic concentration of revenue + Where to find: 'Our Business' Why it matters: Dependence on one region or country. Benchmark: One geography dominant = flag	100% of revenue is within India. Operations are concentrated in high-density urban areas/metro cities (Mumbai, Bengaluru, Delhi NCR, Hyderabad, Chennai, Pune, Kolkata), representing geographic concentration.	Watch	Notes to Restated Financials, Note 18, p.377
37	Asset-heavy or asset-light? + Where to find: Balance sheet, fixed assets Why it matters: Shapes return on capital and future funding needs. Benchmark: -	Asset-light on real estate (dark stores are leased, represented by ₹2,506.21 cr in ROU assets in FY26) but requires fit-out capex (₹881.45 cr in Net PPE in FY26).	OK	Restated Financials, Summary Statement of Assets and Liabilities, p.71
38	Working-capital intensity + Where to find: Balance sheet Why it matters: High intensity traps cash as the business grows. Benchmark: Rising WC/sales = flag	Negative working capital cycle: Cash Conversion Cycle was -16.46 days in FY26 (-2.52 days in FY25, -21.55 days in FY24) due to stretching payables (73.55 payable days) relative to debtor collection (39.10 days) and inventory (17.99 days).	OK	Restated Financials, p.71-72
39	Distribution model (direct / dealer / online) + Where to find: 'Our Business' Why it matters: Trade-off between control, margin and reach. Benchmark: -	Online direct-to-consumer (D2C) delivery model via mobile application/website, supported by a network of dark stores.	OK	Our Business, p.232
40	Order book / backlog (if relevant) + Where to find: 'Our Business', MD&A Why it matters: Forward revenue visibility. Benchmark: Shrinking backlog = flag	N/A. Retail e-commerce does not maintain an order book/backlog.	N/A	Our Business, p.232
41	Cyclicality of the business + Where to find: Industry, MD&A Why it matters: How durable are earnings through a downturn? Benchmark: Highly cyclical at a peak = flag	Low cyclicality. Groceries and daily essentials are non-discretionary, defensive products, though demand spikes during festivals.	OK	Our Business, p.232
42	Entry barriers / moat - real or weak? + Where to find: Strengths, Competition Why it matters: Whether good returns can be sustained. Benchmark: Low barriers = flag	Moat is moderate: scale, network density, last-mile efficiency, and brand. However, entry barriers are low as new players (Amazon Now, Flipkart Minutes) are entering, making it highly competitive.	Watch	Our Business, p.251, 255
43	Key licences / regulatory approvals the business depends on + Where to find: Risk Factors, Govt approvals Why it matters: Licence loss can be existential. Benchmark: Critical pending approvals = flag	FSSAI food business licenses, trade licenses, shops & establishment registrations. Disclosed risk of pending approvals/renewals.	OK	Risk Factors, p.36, 51
44	Technology / obsolescence risk + Where to find: Risk Factors Why it matters: Exposure to disruption. Benchmark: -	High dependency on proprietary technology (WMS, routing engine, app). Technology disruptions represent operational risks.	Watch	Risk Factors, p.49, 57

Section 06

Are The Numbers Real?

Zepto's numbers show hyper-growth, but it is not backed by cash generation. Operating cash flow (CFO) has been negative in all three years (FY26: -Rs 3,462.44 cr, FY25: -Rs 4,624.83 cr, FY24: -Rs 1,097.88 cr). The cash conversion cycle is negative (-16.46 days in FY26) because the company stretches its suppliers (73.55 payable days) to fund collections (39.10 debtor days) and inventory (17.99 inventory days). EBITDA margins improved from -41.3% in FY25 to -23.2% in FY26 but remain deeply negative.

Revenue (3 yrs) and CAGR

Revenue: FY24 ₹4,454.52 cr → FY25 ₹11,109.95 cr → FY26 ₹22,623.58 cr. CAGR: 125.4%.

Is growth organic or acquisition-driven?

Organic. The company has no history of inorganic acquisitions.

Gross margin trend (3 yrs)

Gross Margin: FY24 21.6% → FY25 14.1% → FY26 19.6%. Margins fell in FY25 due to rapid store expansion but recovered in FY26.

EBITDA and EBITDA-margin trend

Operating EBITDA: FY24 -₹1,118.82 cr (-25.1% margin) → FY25 -₹4,589.34 cr (-41.3%) → FY26 -₹5,244.12 cr (-23.2%). EBITDA losses increased in absolute terms but improved in margin terms in FY26.

Sudden margin spike right before the IPO?

No sudden spike, but EBITDA margin improved from -41.3% in FY25 to -23.2% in FY26. It remains deeply negative.

PAT and PAT-margin trend

PAT: FY24 -₹1,214.79 cr (-27.3% margin) → FY25 -₹4,699.71 cr (-42.3%) → FY26 -₹5,905.19 cr (-26.1%). PAT losses increased in absolute terms but improved in margin terms in FY26.

Checkpoint

Finding

Status

Page Ref

Revenue (3 yrs) and CAGR +

Where to find: Restated Financial Statements

Why it matters: The headline growth rate.

Benchmark: -

Revenue: FY24 ₹4,454.52 cr → FY25 ₹11,109.95 cr → FY26 ₹22,623.58 cr. CAGR: 125.4%.

Revenue	FY25	FY26
FY24 ₹4	₹11	₹22

Restated Financials, Summary Statement of Profit and Loss, p.75

Is growth organic or acquisition-driven? +

Where to find: MD&A

Why it matters: Acquired growth is lower quality and harder to sustain.

Benchmark: Mostly inorganic = flag

Organic. The company has no history of inorganic acquisitions.

Basis for Offer Price, p.154

Gross margin trend (3 yrs) +

Where to find: Financials

Why it matters: Pricing power and ability to pass on input costs.

Benchmark: Falling gross margin = flag

Gross Margin: FY24 21.6% → FY25 14.1% → FY26 19.6%. Margins fell in FY25 due to rapid store expansion but recovered in FY26.

Gross Margin	FY25	FY26
FY24 21.6%	14.1%	19.6%. Margins fell in FY25 due to rapid store expansion but recovered in FY26.

Restated Financials, p.75

EBITDA and EBITDA-margin trend +

Where to find: Financials

Why it matters: Core operating profitability.

Benchmark: -

Operating EBITDA	FY25	FY26
FY24 -₹1	-₹4	-₹5

Watch

Restated Financials, p.75

Sudden margin spike right before the IPO? +

Where to find: Compare FY-2 / FY-1 / latest

Why it matters: A classic window-dressing pattern.

Benchmark: Sharp pre-IPO jump = flag

No sudden spike, but EBITDA margin improved from -41.3% in FY25 to -23.2% in FY26. It remains deeply negative.

Restated Financials, p.75

PAT and PAT-margin trend +

Where to find: Financials

Why it matters: The bottom line and its direction.

Benchmark: -

PAT: FY24 -₹1,214.79 cr (-27.3% margin) → FY25 -₹4,699.71 cr (-42.3%) → FY26 -₹5,905.19 cr (-26.1%). PAT losses increased in absolute terms but improved in margin terms in FY26.

PAT	FY25	FY26
FY24 -₹1	-₹4	-₹5

Watch

Restated Financials, p.75

Other income as % of PAT +

Where to find: P&L and notes

Why it matters: Tests whether profit is operating or propped up by 'other income'.

Benchmark: High other-income share = flag

Other Income: FY26 ₹504.79 cr (equivalent to -8.5% of PAT loss of -₹5,905.19 cr). Propped up by interest income on bank deposits and mutual fund gains.

Watch

Restated Financials, p.75

CFO (operating cash flow) trend +

Where to find: Cash flow statement

Why it matters: The cash reality behind reported profit.

Benchmark: -

CFO: FY24 -₹1,097.88 cr → FY25 -₹4,624.83 cr → FY26 -₹3,462.44 cr. Cash outflows decreased in FY26 due to improved working capital management, but remain deeply negative.

CFO	FY25	FY26
FY24 -₹1	-₹4	-₹3

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

CFO / PAT (cash conversion), multi-year +

Where to find: CFO divided by PAT

Why it matters: THE single best earnings-quality test.

Benchmark: Consistently <0.6-0.7 = flag

CFO/PAT: FY24 0.90x → FY25 0.98x → FY26 0.59x. Ratios are based on negative CFO and negative PAT, showing that operating cash loss is less than accounting loss.

CFO/PAT	FY25	FY26
FY24 0.90x	0.98x	0.59x. Ratios are based on negative CFO and negative PAT

Watch

Restated Financials, p.75, 334

Was CFO negative in any year? +

Where to find: Cash flow statement

Why it matters: Operations consuming rather than generating cash.

Benchmark: Any negative CFO year = flag

Yes, CFO was negative in all three years (FY26: -₹3,462.44 cr, FY25: -₹4,624.83 cr, FY24: -₹1,097.88 cr).

CFO was negative in all three years (FY26	FY25	FY24
-₹3	-₹4	-₹1

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

Free cash flow (CFO minus capex) +

Where to find: Cash flow statement

Why it matters: Ability to self-fund growth.

Benchmark: Persistently negative FCF = caution

FCF: FY24 -₹1,220.54 cr → FY25 -₹5,505.95 cr → FY26 -₹4,131.50 cr. FCF is deeply negative in all three years due to operating cash losses and ongoing dark store fit-out capex.

FCF	FY25	FY26
FY24 -₹1	-₹5	-₹4

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

Total debt and net debt +

Where to find: Balance sheet

Why it matters: Absolute leverage.

Benchmark: -

Borrowings are 0 in FY26 and FY25 (₹171.61 cr in FY24). Lease liabilities are ₹2,710.10 cr in FY26 (₹2,187.85 cr in FY25, ₹342.11 cr in FY24). Net Debt is negative if cash/investments (₹5,680.53 cr in FY26) are considered.

Restated Financials, Summary Statement of Assets and Liabilities, p.71-72

Debt / Equity +

Where to find: Balance sheet

Why it matters: Balance-sheet risk (judge vs industry).

Benchmark: Non-financial >1.5-2x = flag (context)

Debt/Equity: 0.00x based on borrowings (excluding lease liabilities). If lease liabilities are included: 27,101.00 / 59,978.87 = 0.45x in FY26.

Restated Financials, Summary Statement of Assets and Liabilities, p.71-72

Interest coverage (EBIT / interest) +

Where to find: P&L

Why it matters: Ability to service debt comfortably.

Benchmark: <2-3x = flag

Interest Coverage: -23.18x in FY26 (-36.26x in FY25, -21.79x in FY24). Negative due to EBIT losses (EBIT is -₹6,138.37 cr in FY26).

Flag

Restated Financials, p.75

ROE and trend +

Where to find: Compute / ratios

Why it matters: Return generated on shareholders' funds.

Benchmark: Low or falling = flag

ROE: FY24 -70.7% → FY25 -54.7% → FY26 -98.5%. Negative due to persistent net losses.

ROE	FY25	FY26
FY24 -70.7%	-54.7%	-98.5%. Negative due to persistent net losses.

Flag

Restated Financials, p.71, 75

ROCE and trend +

Where to find: Compute / ratios

Why it matters: Efficiency of all capital employed.

Benchmark: -

ROCE: FY24 -65.6% → FY25 -58.2% → FY26 -102.3%. Negative due to operating losses. (With lease liabilities: FY24 -55.6%, FY25 -46.4%, FY26 -70.5%).

ROCE	FY25	FY26 -102.3%. Negative due to operating losses. (With lease liabilities	FY25	FY26
FY24 -65.6%	-58.2%	FY24 -55.6%	-46.4%	-70.5%).

Flag

Restated Financials, p.71, 72, 75

ROCE vs cost of capital +

Where to find: Compare

Why it matters: Is the business creating or destroying value?

Benchmark: ROCE below ~12-14% = value-destructive

ROCE is deeply negative (FY26: -102.34%), well below any positive cost of capital, indicating value destruction due to high operating losses.

Flag

Restated Financials, p.71, 72, 75

Debtor (receivable) days and trend +

Where to find: Compute from BS & P&L

Why it matters: Collection quality; rising days can hide channel-stuffing.

Benchmark: Sharply rising = flag

Debtor Days: FY24 26.52 days → FY25 58.84 days → FY26 39.10 days. Debtor days rose in FY25 but improved in FY26.

Debtor Days	FY25	FY26
FY24 26.52 days	58.84 days	39.10 days. Debtor days rose in FY25 but improved in FY26.

Restated Financials, p.71, 75

Inventory days and trend +

Where to find: Compute

Why it matters: Demand mismatch or obsolescence risk.

Benchmark: Sharply rising = flag

Inventory Days (COGS): FY24 13.22 days → FY25 23.35 days → FY26 17.99 days. Inventory days rose in FY25 but improved in FY26.

Inventory Days (COGS)	FY25	FY26
FY24 13.22 days	23.35 days	17.99 days. Inventory days rose in FY25 but improved in FY26.

Restated Financials, p.71, 75

Payable days and trend +

Where to find: Compute

Why it matters: Supplier financing; abnormal stretching can mask stress.

Benchmark: Abnormal stretch = caution

Payable Days (Purchases): FY24 61.30 days → FY25 84.71 days → FY26 73.55 days. Suppliers are stretched to fund the working capital cycle.

Payable Days (Purchases)	FY25	FY26
FY24 61.30 days	84.71 days	73.55 days. Suppliers are stretched to fund the working capital cycle.

Watch

Restated Financials, p.71, 75

Cash conversion cycle +

Where to find: Debtor + inventory - payable days

Why it matters: Overall working-capital health.

Benchmark: Lengthening sharply = flag

Cash Conversion Cycle: FY24 -21.55 days → FY25 -2.52 days → FY26 -16.46 days. Negative cycle is typical for quick commerce but rose to near-zero in FY25 before improving in FY26.

Cash Conversion Cycle	FY25	FY26
FY24 -21.55 days	-2.52 days	-16.46 days. Negative cycle is typical for quick commerce but rose to near-zero in FY25 before improving in FY26.

Restated Financials, p.71, 72, 75

Contingent liabilities vs net worth +

Where to find: 'Contingent Liabilities' note

Why it matters: Off-balance-sheet exposure that can hit equity.

Benchmark: Large vs net worth = flag

Contingent Liabilities: ₹2.01 cr (₹20.10 million) as of March 31, 2026. This represents only 0.03% of Net Worth (₹5,997.89 cr), which is negligible.

Summary of Contingent Liabilities, p.80

Capex history vs proposed capex +

Where to find: Cash flow vs Objects

Why it matters: Execution credibility of the expansion plan.

Benchmark: Proposed >> historical = execution risk

Proposed fit-out capex: ₹1,628.98 cr (FY27-FY30) for 1,904 new stores. Historical capex (PPE purchase): FY24 ₹122.66 cr → FY25 ₹881.12 cr → FY26 ₹669.06 cr. Proposed capex is significantly higher, representing execution risk.

904 new stores. Historical capex (PPE purchase)	FY25	FY26
FY24 ₹122.66 cr	₹881.12 cr	₹669.06 cr. Proposed capex is significantly higher

Watch

Objects of the Offer, p.144 | Cash Flows, p.334

Dividend history +

Where to find: Financials

Why it matters: Signal of capital discipline (interpret in context).

Benchmark: -

No dividends declared or paid in the last three Fiscals or subsequent period.

Dividend Policy, p.319

Standalone vs consolidated divergence +

Where to find: Both statement sets

Why it matters: Where the profits - and losses - actually sit.

Benchmark: Big divergence = investigate

The company has only presented Restated Consolidated Financial Information in the DRHP (no Standalone financials are disclosed).

N/A

Restated Consolidated Financial Information, p.320

Material restatement adjustments? +

Where to find: Restated Financial Statements

Why it matters: Prior-period corrections that change the trend.

Benchmark: Material restatements = flag

No material restatement adjustments were made to the audited financials other than adjustments to give effect to the common control business combination (amalgamation of Kiranakart Pte. Ltd.).

Statement of Restatement Adjustments, Annexure VII, p.393

Auditor qualifications / emphasis of matter +

Where to find: Auditor's report

Why it matters: The auditor's own stated doubts.

Benchmark: Any qualification = flag

Qualified opinion on internal controls (IFCoFR) for FY25 and FY26 due to lack of appropriate IT general controls (access and change management). Modifications on books of account regarding audit trail (edit log) features on certain software.

Flag

Auditor's Report, p.326-327

Aggressive revenue-recognition policy? +

Where to find: Significant accounting policies

Why it matters: Timing games that inflate current profit.

Benchmark: Aggressive recognition = flag

Standard policy: Revenue recognized upon delivery of goods and satisfaction of performance obligations. Adheres to Ind AS 115. No aggressive revenue recognition practices identified.

Material Accounting Policies, Note 1.2, p.373

Section 07

Governance & Related Parties

Promoters hold 18.47% pre-IPO on a fully diluted basis, and none of their shares are pledged. However, KMP remuneration is high in absolute terms (Ramesh Bafna was paid Rs 3.85 cr in FY26). S.R. Batliboi & Associates LLP qualified their report on internal controls (IFCoFR) due to access and change control issues in IT systems. Related-party transactions include significant intercompany loans to operational subsidiaries, though non-eliminated RPTs are negligible.

#	Checkpoint	Finding	Status	Page Ref
73	Promoter background and track record + Where to find: 'Our Promoters', 'Management' Why it matters: The quality and integrity of stewardship. Benchmark: Prior failure/fraud = flag	Promoters Aadit Palicha (Managing Director & CEO, age 23) and Kaivalya Vohra (WTD, age 23) are co-founders with a strong track record of hyper-scaling Zepto, though they have limited experience in other listed companies.	OK	Our Promoters and Promoter Group, p.313
74	Promoter holding pre-IPO + Where to find: 'Capital Structure' Why it matters: Skin in the game today. Benchmark: -	Promoters hold 2,327,948,161 equity shares representing 18.47% of pre-IPO paid-up capital on a fully diluted basis.	OK	Our Promoters and Promoter Group, p.313
75	Promoter holding post-IPO + Where to find: 'Capital Structure' Why it matters: Alignment going forward. Benchmark: Very low post-IPO = misalignment	Promoters are not selling in the OFS, so post-IPO share count remains exactly 2,327,948,161. Post-IPO holding % is represented as [●]% as the price band is not finalized.	OK	Capital Structure, p.94 \| Our Promoters, p.313
76	Promoter share pledge + Where to find: 'Capital Structure', Risk Factors Why it matters: Pledging signals financial stress. Benchmark: Any meaningful pledge = flag	None of the equity shares held by the promoters are subject to any pledge or encumbrance.	OK	Capital Structure, p.132
77	Promoter / KMP remuneration vs PAT and peers + Where to find: 'Management' Why it matters: Cash extraction relative to profits. Benchmark: High pay vs PAT = flag	FY26 Remuneration: Aadit Palicha ₹2.74 cr, Kaivalya Vohra ₹2.61 cr, Ramesh Bafna ₹3.85 cr. Remuneration is high in absolute terms but small relative to the net loss of ₹5,905.19 cr.	Watch	Management, p.300 \| RPT Note, p.375
78	Group structure - complex / circular / many entities? + Where to find: 'Our Group Companies' Why it matters: Complexity is where value and leakage hide. Benchmark: Complex web = flag	No group companies. The company has a simple structure with only operational subsidiaries (Zepto Marketplace Private Limited, Zavrix Realty, etc.), though intercompany loans are substantial.	OK	Related Party Transactions, p.375-377
79	Auditor - reputable? Recent change or resignation? + Where to find: 'Auditors', history Why it matters: Audit credibility and any pre-IPO churn. Benchmark: Resignation before IPO = flag	Statutory auditors are S.R. Batliboi & Associates LLP (EY network, reputable Big 4 firm), appointed on March 9, 2024. Former auditor Ruthala & Co. resigned due to preoccupation on March 7, 2024.	OK	General Information, p.87
80	CFO / KMP churn before the IPO + Where to find: 'Management', history Why it matters: Instability in key finance roles before listing. Benchmark: CFO exit pre-IPO = flag	Statutory CFO Ramesh Bafna has been in office since May 15, 2023 (stable). Company Secretary Megha Hegde resigned after 2 months in Oct 2024, replaced by Samad Shariff in Dec 2024.	OK	Management, p.296-297
81	Board: proportion of independent directors + Where to find: 'Management' Why it matters: Strength of independent oversight. Benchmark: Below norms = flag	The Board has 6 directors, including 2 Independent Directors (33.3%). Paul Hudson is the Non-Executive Nominee Director and Chairman, so this complies with SEBI LODR requirements.	OK	Management, p.296, 302
82	Independent-director credentials - real or token? + Where to find: Director bios Why it matters: Whether oversight is actually effective. Benchmark: Token / related IDs = flag	Independent director credentials are strong: Akhil Gupta (former Vice Chairman of Bharti Enterprises/Airtel, 70 years old) and Anulakshmi Hariharan (resides in San Francisco, on the board of Rappi Inc. and Avis Car System, 46 years old).	OK	Management, p.296, 298
83	ESOP / outstanding options - dilution overhang + Where to find: 'Capital Structure' Why it matters: Future dilution of your stake. Benchmark: Large unvested pool = caution	Outstanding options in force under ESOP 2025 are 1,212,276,973 options, representing 9.62% of pre-offer fully diluted shares. The total ESOP pool is 1,475,434,008 options (~11.71%). Exercise price is ₹0. This represents a significant dilution overhang.	Watch	Capital Structure, p.139
84	Lock-in: promoter and anchor / pre-IPO investors + Where to find: 'Capital Structure' Why it matters: Share supply that hits the market post-listing. Benchmark: Big near-term unlocks = caution	Promoters' minimum contribution of 20% locked in for 3 years (or 18 months); all other pre-issue shares (~80% of company) locked in for 1 year from listing. Represents a large potential supply overhang after 1 year.	Watch	Capital Structure, p.94
85	Past corporate-governance issues / regulatory strictures + Where to find: Risk Factors, Litigation Why it matters: A pattern of past behaviour. Benchmark: Any history = flag	No past corporate-governance issues or regulatory strictures against promoters. However, active regulatory investigations exist (ED summons requesting information for promoters/directors Aadit Palicha and Kaivalya Vohra).	Watch	Outstanding Litigation, p.589

Related Party Transactions (Extraction Risk)

#	Checkpoint	Finding	Status	Page Ref
86	Sales to related parties (% of revenue) + Where to find: RPT note Why it matters: Revenue propped up by group entities? Benchmark: High % = flag	No sales to related parties in the consolidated statements (except intercompany transactions of ₹189.73 cr to subsidiary ZMPL which are eliminated on consolidation).	OK	Related Party Disclosures, Note 30, p.375
87	Purchases from related parties (% of costs) + Where to find: RPT note Why it matters: A channel to manipulate margins. Benchmark: High % = flag	Negligible. Modulus Hospitality Services LLP (relative has significant influence) provided services of ₹3.93 million (0.00% of costs) in FY25 and ₹0 in FY26.	OK	Related Party Disclosures, Note 30, p.375
88	Loans / advances to promoter or related entities + Where to find: RPT note Why it matters: Company cash diverted to insiders. Benchmark: Any sizeable loan out = flag	No loans/advances to promoters or other non-eliminated RPs. Loans were only given to operational subsidiaries: Kiranakart Wholesale (receivable ₹8.49 cr in FY25, ₹0 in FY26) and ESOP Trust (₹471.27 cr in FY26). All intercompany loans are eliminated on consolidation.	OK	Related Party Disclosures, Note 30, p.376
89	Rent / royalty / brand fees paid to related parties + Where to find: RPT note Why it matters: Recurring cash extraction from the company. Benchmark: Royalty to promoter = flag	Nil (no royalty or brand fees paid to promoters or other related parties, only standard intercompany chargebacks which are eliminated).	OK	Related Party Disclosures, Note 30, p.375
90	Outstanding RPT balances (receivable / payable) + Where to find: RPT note Why it matters: Money stuck with related parties. Benchmark: Large outstanding = flag	Negligible outstanding balances with non-eliminated RPs (Salary payable to Aadit Palicha: ₹0.72 cr, Kaivalya Vohra: ₹0.66 cr in FY26). Intercompany outstanding balances (eliminated) are large: ZMPL receivable ₹492.92 cr in FY26.	OK	Related Party Disclosures, Note 30, p.376
91	RPT trend over 3 years + Where to find: RPT note Why it matters: Rising reliance on related-party dealings. Benchmark: Increasing trend = flag	Transactions with non-eliminated RPs decreased (Modulus Hospitality services fell from ₹3.93 million in FY25 to ₹0 in FY26). Intercompany RPTs (eliminated) increased to support operational growth.	OK	Related Party Disclosures, Note 30, p.375-376
92	Disclosed at arm's length? Pricing basis? + Where to find: RPT note Why it matters: Whether terms are fair to minority shareholders. Benchmark: 'At cost'/unclear basis = scrutinise	Yes, transactions are disclosed as conducted on an arm's length basis and in the ordinary course of business.	OK	Related Party Disclosures, Note 30, p.375
93	Overall RPT concern level (Low / Medium / High) + Where to find: Synthesise this layer Why it matters: Your single judgment on related-party risk. Benchmark: -	Low. No major non-arm's length leakages or loans to promoters. Intercompany funding is high but standard to support subsidiaries.	OK	Related Party Disclosures, Note 30, p.375-376

Section 08

Litigation & Regulatory

Quantification of pending criminal, civil, and direct/indirect tax litigations against the company, its promoters, and subsidiaries measured against net worth and annual profitability.

#	Checkpoint	Finding	Status	Page Ref
94	Criminal cases against promoters / directors + Where to find: 'Outstanding Litigation' Why it matters: An integrity red flag that can override the numbers. Benchmark: Any = serious flag	One criminal complaint under Minimum Wages Act, 1948 filed by labor inspector against promoter Kaivalya Vohra regarding record-keeping lapses at Karnataka hub. Summoms issued; High Court of Karnataka has stayed the proceedings. Pending.	Flag	Outstanding Litigation, p.586, 587
95	Material civil / commercial cases - company + Where to find: 'Outstanding Litigation' Why it matters: Direct business and financial risk. Benchmark: -	Nil (no outstanding civil or commercial litigation exceeding the materiality threshold of ₹102.22 million).	OK	Outstanding Litigation, p.581
96	Direct + indirect tax disputes and amounts + Where to find: 'Outstanding Litigation' Why it matters: Contingent cash outflows. Benchmark: Large vs PAT = flag	Direct Tax disputes: 8 cases involving ₹46.10 cr (₹460.95 million); Indirect Tax disputes: 11 cases involving ₹55.80 cr (₹557.95 million) for Company and 6 cases involving ₹0.33 cr (₹3.26 million) for Subsidiaries. Total tax claims = ₹102.22 cr.	Watch	Outstanding Litigation, p.590
97	Regulatory / statutory actions (SEBI, RBI, environmental, labour) + Where to find: 'Outstanding Litigation' Why it matters: Signals compliance culture. Benchmark: Active actions = flag	Yes, CCPA penalty of ₹0.70 million (₹7 lakh) for dark patterns ('Basket Sneaking' & 'Drip Pricing') against ZMPL (appealed, stayed by NCDRC). Summoms from ED to promoters Aadit Palicha and Kaivalya Vohra requesting information. Food safety cases in Meerut/Pune.	Watch	Outstanding Litigation, p.582, 588, 590
98	Total quantifiable amount involved + Where to find: Litigation summary Why it matters: Sizing the aggregate exposure. Benchmark: -	Total quantifiable amount involved in litigation is ₹102.30 cr (₹102.22 cr tax claims + ₹0.08 cr regulatory penalties).	Watch	Outstanding Litigation, p.582, 590
99	Materiality vs PAT and net worth + Where to find: Compare Why it matters: Whether the exposure is survivable. Benchmark: Multiple of PAT / net worth = flag	Total quantifiable litigation (₹102.30 cr) is 1.7% of the FY26 net worth of ₹5,997.89 cr and represents 1.73% of the FY26 loss of ₹5,905.19 cr.	OK	Outstanding Litigation, p.590
100	Any case threatening a key licence or the business model? + Where to find: Litigation, Risk Factors Why it matters: Existential risk to operations. Benchmark: Yes = serious flag	CCPA dark patterns order directed Zepto to ensure discontinuation of dark patterns and conduct regular self-audits. This impacts user retention tactics but does not threaten key licenses.	Watch	Outstanding Litigation, p.588

Section 09

Valuation

Zepto's IPO price and multiples are not yet determined. However, peer comparison shows Zomato (Eternal) trading at a P/E of 635.05x (consolidated), with Swiggy trading at a loss (P/E NA). Zepto's pre-IPO WACA of Series H CCPS in late 2025 was Rs 37.74 per share (adjusted). Public investors should compare the final IPO price band against this WACA to assess the markup being charged.

WACA Markup vs Issue Price (Rip-off Checkpoint)

WACA of primary issuances in the last 18 months is ₹37.74 per share. The IPO price is represented as [●], so the exact markup cannot be computed yet.

#	Checkpoint	Finding	Status	Page Ref
101	IPO P/E (post-issue, upper band) + Where to find: Basis for Offer Price / compute Why it matters: The headline earnings multiple you're paying. Benchmark: -	Not determined as the price band is represented as [●] in the DRHP.	OK	Basis for Offer Price, p.158
102	Peer P/E - and is the peer set fair or cherry-picked? + Where to find: 'Basis for Offer Price' Why it matters: Companies pick flattering peers; rebuild the set yourself. Benchmark: Cherry-picked rich peers = flag	Peer set: Swiggy Limited (Diluted EPS ₹-16.87, P/E NA due to losses) and Eternal Limited (Zomato) (Diluted EPS ₹0.39, P/E 635.05). Peer set is fair as they represent the only other scaled quick commerce players in India.	OK	Basis for Offer Price, p.161
103	EV / EBITDA vs peers + Where to find: Compute / peers Why it matters: A capital-structure-neutral comparison. Benchmark: -	EV/EBITDA is not calculable for Zepto due to price band represented as [●] and negative EBITDA (₹-5,244.12 cr in FY26). Peers: Swiggy Instamart EBITDA is negative (₹-858.00 cr); Zomato Blinkit is EBITDA positive (₹37.00 cr).	OK	Basis for Offer Price, p.161 \| Benchmarking, p.171, 174
104	Price / Sales (especially if loss-making) + Where to find: Compute Why it matters: The relevant lens for unprofitable companies. Benchmark: Aggressive P/S on losses = flag	Not calculable for Zepto as price band is represented as [●]. Peer Zomato (Eternal) has Price/Sales of ~12.2x and Swiggy of ~6.3x (based on closing market price on May 25, 2026).	OK	Basis for Offer Price, p.161
105	Price / Book + Where to find: Compute Why it matters: Relevant for asset-heavy and financial businesses. Benchmark: -	Not calculable for Zepto as price band is represented as [●]. Peer Zomato (Eternal) has Price/Book of ~14.6x and Swiggy of ~4.1x (based on closing price on May 25, 2026).	OK	Basis for Offer Price, p.161
106	Implied market cap at IPO + Where to find: Compute Why it matters: The absolute size of what you're buying. Benchmark: -	Not determined as the price band is represented as [●] in the DRHP. Based on pre-offer share count of 12,603,195,213, it will be: (12,603,195,213 + Fresh Issue shares) * IPO price.	OK	Basis for Offer Price, p.158
107	ROE vs peers + Where to find: Compare Why it matters: Does quality justify any premium? Benchmark: Premium + lower ROE = flag	Zepto ROE is -98.5% in FY26. Peers: Swiggy consolidated ROE is -22.7% (due to net loss of ₹2,636 cr); Zomato (Eternal) consolidated ROE is +1.18% (due to net profit of ₹351 cr). Zepto's ROE is significantly lower.	Flag	Basis for Offer Price, p.161
108	ROCE vs peers + Where to find: Compare Why it matters: Capital efficiency relative to price. Benchmark: -	Zepto ROCE is -102.3% in FY26. Peer Zomato (Eternal) ROCE is positive (~1.2% consolidated); Swiggy ROCE is negative. Zepto's ROCE is significantly lower than Zomato's but comparable to Swiggy's.	Flag	Basis for Offer Price, p.161
109	Growth vs peers + Where to find: Compare Why it matters: Does faster growth justify the premium? Benchmark: Premium + slower growth = flag	Zepto Revenue growth is 125.4% CAGR over FY24-FY26 (Revenue grew 103.6% in FY26 to ₹22,623.58 cr). Peer Swiggy grew by ~26% in FY26 (consolidated) and Zomato by ~45% (consolidated). Zepto is growing significantly faster.	OK	Basis for Offer Price, p.161
110	Margins vs peers + Where to find: Compare Why it matters: Quality of earnings relative to price. Benchmark: -	Zepto gross margin is 19.6% and EBITDA margin is -23.2% in FY26. Peer Zomato (Eternal) gross margin is ~21% and EBITDA margin ~1.5% (consolidated). Swiggy gross margin is ~18% and EBITDA margin ~-8% (consolidated).	Watch	Basis for Offer Price, p.161
111	IPO price vs WACA / pre-IPO placement (the markup) + Where to find: Basis for Offer Price Why it matters: What insiders paid versus what you're paying. Benchmark: Large multiple over WACA = flag	WACA of primary issuances in the last 18 months is ₹37.74 per share. The IPO price is represented as [●], so the exact markup cannot be computed yet.	OK	Basis for Offer Price, p.180-181
112	Is the premium justified by ROCE / ROE / growth / margins? + Where to find: Synthesise Why it matters: The core valuation verdict. Benchmark: Premium unsupported by quality = flag	The premium over WACA cannot be computed yet. However, the premium over asset value (NAV ₹2.95) is likely high, which is justified by Zepto's faster growth (125.4% CAGR) but offset by negative ROCE/ROE and losses.	Watch	Basis for Offer Price, p.161
113	What growth does the price implicitly assume? + Where to find: Reverse the multiple / judgment Why it matters: Are the embedded expectations realistic? Benchmark: Heroic assumptions = flag	Consensus assumptions require Zepto to maintain a revenue growth of >50% and achieve EBITDA breakeven within 18-24 months post-IPO to justify a multi-billion dollar valuation.	Watch	Basis for Offer Price, p.158

Section 10

In The Company's Own Words

Material risk disclosures extracted directly from the Risk Factors section of the RHP document, highlighting internal and external threats admitted by management.

Risk Factor 114 OK

Top 5 risk factors the company itself lists

"(1) History of losses (₹5,905.19 cr in FY26) and negative CFO; (2) Failure to retain/acquire users cost-effectively; (3) Dependency on acquiring/retaining partners; (4) Delivery partner retention/labor risks; (5) Dark store expansion and leasing risks."

Risk Factor 115 Flag

Any genuine dealbreaker buried in boilerplate?

"Yes, active regulatory investigations (ED summons to promoters Aadit Palicha and Kaivalya Vohra requesting information); CCPA dark patterns investigation and ₹0.70 million penalty; and minimum wage criminal complaint against Kaivalya Vohra."

Risk Factor 116 OK

Quantified risks (e.g. 'X would cut revenue by Y%')

"Quantified risks are primarily litigations and theft: ₹102.22 cr tax claims, ₹0.07 cr CCPA penalty, ₹0.01 cr food safety penalty, and ~₹0.22 cr in theft cases. No specific revenue-impact percentage is quantified."

Risk Factor 117 Watch

Going-concern or liquidity language anywhere?

"Going concern note in Annexure V lists losses of ₹5,905.19 cr in FY26 but notes that net current assets are positive at ₹4,330.75 cr and additional equity capital has been raised. No going-concern qualification from auditors."

#	Checkpoint	Finding	Status	Page Ref
114	Top 5 risk factors the company itself lists + Where to find: 'Risk Factors' Why it matters: Management's own stated worries - read them first. Benchmark: -	(1) History of losses (₹5,905.19 cr in FY26) and negative CFO; (2) Failure to retain/acquire users cost-effectively; (3) Dependency on acquiring/retaining partners; (4) Delivery partner retention/labor risks; (5) Dark store expansion and leasing risks.	OK	Risk Factors, p.23-33
115	Any genuine dealbreaker buried in boilerplate? + Where to find: 'Risk Factors' Why it matters: The serious risks hide among generic ones; find them. Benchmark: -	Yes, active regulatory investigations (ED summons to promoters Aadit Palicha and Kaivalya Vohra requesting information); CCPA dark patterns investigation and ₹0.70 million penalty; and minimum wage criminal complaint against Kaivalya Vohra.	Flag	Outstanding Litigation, p.586, 588, 590
116	Quantified risks (e.g. 'X would cut revenue by Y%') + Where to find: 'Risk Factors' Why it matters: The risks management bothered to quantify are usually the real ones. Benchmark: -	Quantified risks are primarily litigations and theft: ₹102.22 cr tax claims, ₹0.07 cr CCPA penalty, ₹0.01 cr food safety penalty, and ~₹0.22 cr in theft cases. No specific revenue-impact percentage is quantified.	OK	Outstanding Litigation, p.582, 590
117	Going-concern or liquidity language anywhere? + Where to find: Risk Factors / Auditor Why it matters: A direct signal of survival risk. Benchmark: Any going-concern language = serious flag	Going concern note in Annexure V lists losses of ₹5,905.19 cr in FY26 but notes that net current assets are positive at ₹4,330.75 cr and additional equity capital has been raised. No going-concern qualification from auditors.	Watch	Notes to Restated Financials, Note 1.2, p.338

Section 11

Red-Flag Dashboard

Layer-by-Layer Risk Distribution (117 Checkpoints)

1 Story & Positioning (0 OK, 0 Watch, 0 Flag)

1 Story & Positioning (9 OK, 1 Watch, 0 Flag)

2 Issue Structure & Objects (14 OK, 2 Watch, 0 Flag)

3 Business Quality (14 OK, 3 Watch, 0 Flag)

4 Financial Quality (13 OK, 6 Watch, 8 Flag)

5 Governance (9 OK, 4 Watch, 0 Flag)

6 Related Party Transactions (8 OK, 0 Watch, 0 Flag)

7 Litigation & Regulatory (2 OK, 4 Watch, 1 Flag)

8 Valuation (8 OK, 3 Watch, 2 Flag)

9 The Company's Own Risk Factors (2 OK, 1 Watch, 1 Flag)

OK (79)

Watch (24)

Flag (12)

N/A (2)

How To Interpret This Dashboard

Look for clusters, not raw totals. A single red flag in Financial Quality (e.g. CFO/PAT conversion failure) or Governance (e.g. promoter pledge/RPT extraction) carries far greater structural weight than multiple flags in Layer 1. Zero flags is itself suspicious and typically signals incomplete disclosure.

Flags & Watch-outs Roll-Up (36 checkpoints requiring monitoring)

Checkpoint

Finding

Status

Page Ref

Who commissioned the industry report? +

Where to find: 'Industry Overview' footnotes

Why it matters: Company-paid reports (e.g. CRISIL/F&S) skew optimistic - discount accordingly.

Benchmark: Always company-commissioned

The report titled 'India's Quick-Commerce Industry: Market Structure and Growth Drivers' (dated May 30, 2026) was prepared by Redseer Strategy Consultants Private Limited, which was commissioned and paid for by Zepto Limited.

Watch

Industry Overview, p.189

Objects: acquisition - named target or 'future M&A'? +

Where to find: 'Objects of the Offer'

Why it matters: A named, costed target beats a blank cheque for 'inorganic growth'.

Benchmark: Unspecified M&A = flag

Funding inorganic growth through 'unidentified acquisitions' and general corporate purposes (GCP) combined. Capped at 35% of gross proceeds. Unidentified acquisitions alone are capped at 10% of gross proceeds (₹801.00 cr). No target is named.

Watch

Objects of the Offer, p.143-144

General Corporate Purposes (GCP) as % of fresh issue +

Where to find: 'Objects of the Offer'

Why it matters: SEBI caps GCP (and unidentified objects). High GCP = undefined use of your money.

Benchmark: Maxed-out / high GCP = flag

GCP is capped at 25% of gross proceeds (₹2,002.50 cr or ₹20,025 million). The remaining unallocated proceeds (₹2,801.30 cr or 34.97% of fresh issue) will go towards GCP and Inorganic Growth combined.

Watch

Objects of the Offer, p.144

Geographic concentration of revenue +

Where to find: 'Our Business'

Why it matters: Dependence on one region or country.

Benchmark: One geography dominant = flag

100% of revenue is within India. Operations are concentrated in high-density urban areas/metro cities (Mumbai, Bengaluru, Delhi NCR, Hyderabad, Chennai, Pune, Kolkata), representing geographic concentration.

Watch

Notes to Restated Financials, Note 18, p.377

Entry barriers / moat - real or weak? +

Where to find: Strengths, Competition

Why it matters: Whether good returns can be sustained.

Benchmark: Low barriers = flag

Moat is moderate: scale, network density, last-mile efficiency, and brand. However, entry barriers are low as new players (Amazon Now, Flipkart Minutes) are entering, making it highly competitive.

Watch

Our Business, p.251, 255

Technology / obsolescence risk +

Where to find: Risk Factors

Why it matters: Exposure to disruption.

Benchmark: -

High dependency on proprietary technology (WMS, routing engine, app). Technology disruptions represent operational risks.

Watch

Risk Factors, p.49, 57

EBITDA and EBITDA-margin trend +

Where to find: Financials

Why it matters: Core operating profitability.

Benchmark: -

Operating EBITDA	FY25	FY26
FY24 -₹1	-₹4	-₹5

Watch

Restated Financials, p.75

PAT and PAT-margin trend +

Where to find: Financials

Why it matters: The bottom line and its direction.

Benchmark: -

PAT: FY24 -₹1,214.79 cr (-27.3% margin) → FY25 -₹4,699.71 cr (-42.3%) → FY26 -₹5,905.19 cr (-26.1%). PAT losses increased in absolute terms but improved in margin terms in FY26.

PAT	FY25	FY26
FY24 -₹1	-₹4	-₹5

Watch

Restated Financials, p.75

Other income as % of PAT +

Where to find: P&L and notes

Why it matters: Tests whether profit is operating or propped up by 'other income'.

Benchmark: High other-income share = flag

Other Income: FY26 ₹504.79 cr (equivalent to -8.5% of PAT loss of -₹5,905.19 cr). Propped up by interest income on bank deposits and mutual fund gains.

Watch

Restated Financials, p.75

CFO (operating cash flow) trend +

Where to find: Cash flow statement

Why it matters: The cash reality behind reported profit.

Benchmark: -

CFO: FY24 -₹1,097.88 cr → FY25 -₹4,624.83 cr → FY26 -₹3,462.44 cr. Cash outflows decreased in FY26 due to improved working capital management, but remain deeply negative.

CFO	FY25	FY26
FY24 -₹1	-₹4	-₹3

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

CFO / PAT (cash conversion), multi-year +

Where to find: CFO divided by PAT

Why it matters: THE single best earnings-quality test.

Benchmark: Consistently <0.6-0.7 = flag

CFO/PAT: FY24 0.90x → FY25 0.98x → FY26 0.59x. Ratios are based on negative CFO and negative PAT, showing that operating cash loss is less than accounting loss.

CFO/PAT	FY25	FY26
FY24 0.90x	0.98x	0.59x. Ratios are based on negative CFO and negative PAT

Watch

Restated Financials, p.75, 334

Was CFO negative in any year? +

Where to find: Cash flow statement

Why it matters: Operations consuming rather than generating cash.

Benchmark: Any negative CFO year = flag

Yes, CFO was negative in all three years (FY26: -₹3,462.44 cr, FY25: -₹4,624.83 cr, FY24: -₹1,097.88 cr).

CFO was negative in all three years (FY26	FY25	FY24
-₹3	-₹4	-₹1

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

Free cash flow (CFO minus capex) +

Where to find: Cash flow statement

Why it matters: Ability to self-fund growth.

Benchmark: Persistently negative FCF = caution

FCF: FY24 -₹1,220.54 cr → FY25 -₹5,505.95 cr → FY26 -₹4,131.50 cr. FCF is deeply negative in all three years due to operating cash losses and ongoing dark store fit-out capex.

FCF	FY25	FY26
FY24 -₹1	-₹5	-₹4

Flag

Restated Financials, Summary Statement of Cash Flows, p.334

Interest coverage (EBIT / interest) +

Where to find: P&L

Why it matters: Ability to service debt comfortably.

Benchmark: <2-3x = flag

Interest Coverage: -23.18x in FY26 (-36.26x in FY25, -21.79x in FY24). Negative due to EBIT losses (EBIT is -₹6,138.37 cr in FY26).

Flag

Restated Financials, p.75

ROE and trend +

Where to find: Compute / ratios

Why it matters: Return generated on shareholders' funds.

Benchmark: Low or falling = flag

ROE: FY24 -70.7% → FY25 -54.7% → FY26 -98.5%. Negative due to persistent net losses.

ROE	FY25	FY26
FY24 -70.7%	-54.7%	-98.5%. Negative due to persistent net losses.

Flag

Restated Financials, p.71, 75

ROCE and trend +

Where to find: Compute / ratios

Why it matters: Efficiency of all capital employed.

Benchmark: -

ROCE: FY24 -65.6% → FY25 -58.2% → FY26 -102.3%. Negative due to operating losses. (With lease liabilities: FY24 -55.6%, FY25 -46.4%, FY26 -70.5%).

ROCE	FY25	FY26 -102.3%. Negative due to operating losses. (With lease liabilities	FY25	FY26
FY24 -65.6%	-58.2%	FY24 -55.6%	-46.4%	-70.5%).

Flag

Restated Financials, p.71, 72, 75

ROCE vs cost of capital +

Where to find: Compare

Why it matters: Is the business creating or destroying value?

Benchmark: ROCE below ~12-14% = value-destructive

ROCE is deeply negative (FY26: -102.34%), well below any positive cost of capital, indicating value destruction due to high operating losses.

Flag

Restated Financials, p.71, 72, 75

Payable days and trend +

Where to find: Compute

Why it matters: Supplier financing; abnormal stretching can mask stress.

Benchmark: Abnormal stretch = caution

Payable Days (Purchases): FY24 61.30 days → FY25 84.71 days → FY26 73.55 days. Suppliers are stretched to fund the working capital cycle.

Payable Days (Purchases)	FY25	FY26
FY24 61.30 days	84.71 days	73.55 days. Suppliers are stretched to fund the working capital cycle.

Watch

Restated Financials, p.71, 75

Capex history vs proposed capex +

Where to find: Cash flow vs Objects

Why it matters: Execution credibility of the expansion plan.

Benchmark: Proposed >> historical = execution risk

904 new stores. Historical capex (PPE purchase)	FY25	FY26
FY24 ₹122.66 cr	₹881.12 cr	₹669.06 cr. Proposed capex is significantly higher

Watch

Objects of the Offer, p.144 | Cash Flows, p.334

Auditor qualifications / emphasis of matter +

Where to find: Auditor's report

Why it matters: The auditor's own stated doubts.

Benchmark: Any qualification = flag

Flag

Auditor's Report, p.326-327

Promoter / KMP remuneration vs PAT and peers +

Where to find: 'Management'

Why it matters: Cash extraction relative to profits.

Benchmark: High pay vs PAT = flag

FY26 Remuneration: Aadit Palicha ₹2.74 cr, Kaivalya Vohra ₹2.61 cr, Ramesh Bafna ₹3.85 cr. Remuneration is high in absolute terms but small relative to the net loss of ₹5,905.19 cr.

Watch

Management, p.300 | RPT Note, p.375

ESOP / outstanding options - dilution overhang +

Where to find: 'Capital Structure'

Why it matters: Future dilution of your stake.

Benchmark: Large unvested pool = caution

Outstanding options in force under ESOP 2025 are 1,212,276,973 options, representing 9.62% of pre-offer fully diluted shares. The total ESOP pool is 1,475,434,008 options (~11.71%). Exercise price is ₹0. This represents a significant dilution overhang.

Watch

Capital Structure, p.139

Lock-in: promoter and anchor / pre-IPO investors +

Where to find: 'Capital Structure'

Why it matters: Share supply that hits the market post-listing.

Benchmark: Big near-term unlocks = caution

Promoters' minimum contribution of 20% locked in for 3 years (or 18 months); all other pre-issue shares (~80% of company) locked in for 1 year from listing. Represents a large potential supply overhang after 1 year.

Watch

Capital Structure, p.94

Past corporate-governance issues / regulatory strictures +

Where to find: Risk Factors, Litigation

Why it matters: A pattern of past behaviour.

Benchmark: Any history = flag

No past corporate-governance issues or regulatory strictures against promoters. However, active regulatory investigations exist (ED summons requesting information for promoters/directors Aadit Palicha and Kaivalya Vohra).

Watch

Outstanding Litigation, p.589

Criminal cases against promoters / directors +

Where to find: 'Outstanding Litigation'

Why it matters: An integrity red flag that can override the numbers.

Benchmark: Any = serious flag

One criminal complaint under Minimum Wages Act, 1948 filed by labor inspector against promoter Kaivalya Vohra regarding record-keeping lapses at Karnataka hub. Summoms issued; High Court of Karnataka has stayed the proceedings. Pending.

Flag

Outstanding Litigation, p.586, 587

Direct + indirect tax disputes and amounts +

Where to find: 'Outstanding Litigation'

Why it matters: Contingent cash outflows.

Benchmark: Large vs PAT = flag

Direct Tax disputes: 8 cases involving ₹46.10 cr (₹460.95 million); Indirect Tax disputes: 11 cases involving ₹55.80 cr (₹557.95 million) for Company and 6 cases involving ₹0.33 cr (₹3.26 million) for Subsidiaries. Total tax claims = ₹102.22 cr.

Watch

Outstanding Litigation, p.590

Regulatory / statutory actions (SEBI, RBI, environmental, labour) +

Where to find: 'Outstanding Litigation'

Why it matters: Signals compliance culture.

Benchmark: Active actions = flag

Yes, CCPA penalty of ₹0.70 million (₹7 lakh) for dark patterns ('Basket Sneaking' & 'Drip Pricing') against ZMPL (appealed, stayed by NCDRC). Summoms from ED to promoters Aadit Palicha and Kaivalya Vohra requesting information. Food safety cases in Meerut/Pune.

Watch

Outstanding Litigation, p.582, 588, 590

Total quantifiable amount involved +

Where to find: Litigation summary

Why it matters: Sizing the aggregate exposure.

Benchmark: -

Total quantifiable amount involved in litigation is ₹102.30 cr (₹102.22 cr tax claims + ₹0.08 cr regulatory penalties).

Watch

Outstanding Litigation, p.582, 590

100

Any case threatening a key licence or the business model? +

Where to find: Litigation, Risk Factors

Why it matters: Existential risk to operations.

Benchmark: Yes = serious flag

CCPA dark patterns order directed Zepto to ensure discontinuation of dark patterns and conduct regular self-audits. This impacts user retention tactics but does not threaten key licenses.

Watch

Outstanding Litigation, p.588

107

ROE vs peers +

Where to find: Compare

Why it matters: Does quality justify any premium?

Benchmark: Premium + lower ROE = flag

Zepto ROE is -98.5% in FY26. Peers: Swiggy consolidated ROE is -22.7% (due to net loss of ₹2,636 cr); Zomato (Eternal) consolidated ROE is +1.18% (due to net profit of ₹351 cr). Zepto's ROE is significantly lower.

Flag

Basis for Offer Price, p.161

108

ROCE vs peers +

Where to find: Compare

Why it matters: Capital efficiency relative to price.

Benchmark: -

Zepto ROCE is -102.3% in FY26. Peer Zomato (Eternal) ROCE is positive (~1.2% consolidated); Swiggy ROCE is negative. Zepto's ROCE is significantly lower than Zomato's but comparable to Swiggy's.

Flag

Basis for Offer Price, p.161

110

Margins vs peers +

Where to find: Compare

Why it matters: Quality of earnings relative to price.

Benchmark: -

Zepto gross margin is 19.6% and EBITDA margin is -23.2% in FY26. Peer Zomato (Eternal) gross margin is ~21% and EBITDA margin ~1.5% (consolidated). Swiggy gross margin is ~18% and EBITDA margin ~-8% (consolidated).

Watch

Basis for Offer Price, p.161

112

Is the premium justified by ROCE / ROE / growth / margins? +

Where to find: Synthesise

Why it matters: The core valuation verdict.

Benchmark: Premium unsupported by quality = flag

The premium over WACA cannot be computed yet. However, the premium over asset value (NAV ₹2.95) is likely high, which is justified by Zepto's faster growth (125.4% CAGR) but offset by negative ROCE/ROE and losses.

Watch

Basis for Offer Price, p.161

113

What growth does the price implicitly assume? +

Where to find: Reverse the multiple / judgment

Why it matters: Are the embedded expectations realistic?

Benchmark: Heroic assumptions = flag

Consensus assumptions require Zepto to maintain a revenue growth of >50% and achieve EBITDA breakeven within 18-24 months post-IPO to justify a multi-billion dollar valuation.

Watch

Basis for Offer Price, p.158

115

Any genuine dealbreaker buried in boilerplate? +

Where to find: 'Risk Factors'

Why it matters: The serious risks hide among generic ones; find them.

Benchmark: -

Yes, active regulatory investigations (ED summons to promoters Aadit Palicha and Kaivalya Vohra requesting information); CCPA dark patterns investigation and ₹0.70 million penalty; and minimum wage criminal complaint against Kaivalya Vohra.

Flag

Outstanding Litigation, p.586, 588, 590

117

Going-concern or liquidity language anywhere? +

Where to find: Risk Factors / Auditor

Why it matters: A direct signal of survival risk.

Benchmark: Any going-concern language = serious flag

Going concern note in Annexure V lists losses of ₹5,905.19 cr in FY26 but notes that net current assets are positive at ₹4,330.75 cr and additional equity capital has been raised. No going-concern qualification from auditors.

Watch

Notes to Restated Financials, Note 1.2, p.338