The Short Version
Zepto's founders hold 18.47% of the company on a post-IPO basis, below the 20% minimum SEBI requires promoters to lock in as skin in the game. That shortfall exists because SEBI refused a specific exemption Zepto asked for in January 2025, one that would have let founder shares from a Singapore-to-India corporate restructuring count toward that threshold. SEBI said no in April 2025. Since then, three venture capital investors, not the founders, have agreed to plug the gap with their own shares, locked in on the same terms a promoter would face.
The Reverse Flip : How Zepto Became An Indian Company
Before it was structured to list in India, Zepto's Indian operating entity was wholly owned by Kiranakart Pte. Ltd. (KPL), a Singapore company. That's a standard flip structure for Indian startups that raised early capital offshore. To list in Mumbai, Zepto had to flip it back.
A Scheme of Arrangement did that job. Sanctioned by the NCLT in Mumbai and the Singapore High Court on January 9 and January 27, 2025 respectively, and effective February 4, 2025, KPL's entire business was amalgamated into the Indian company, and the shares the Indian entity had issued to KPL were cancelled. Face value was sub-divided from ₹10 to ₹5 per share as part of the same restructuring. The independent valuer set KPL's per-share worth at ₹71,910.87 for the purposes of the scheme. All standard mechanics for this kind of flip. Where it gets interesting is what Zepto asked for next.
The Ask : What Zepto Wanted From SEBI
On January 22, 2025, Zepto filed a formal exemption application with SEBI, seeking relief under Regulation 300(1)(a) of the SEBI ICDR Regulations from a strict reading of two other rules, Regulation 8 and Regulation 15(1)(b). Stripped of the citation numbers, Zepto wanted two things:
First, that equity shares created when Preference Shares (issued via the Scheme) converted should be exempt from the usual one-year minimum holding period, so they could be sold through the IPO's Offer for Sale despite being newly created instruments.
Second, that those same Scheme-linked Preference Shares, even though technically less than a year old post-restructuring, should still be allowed to count toward the company's Minimum Promoter's Contribution, on the basis that the underlying capital behind them had actually been held for over a year before the Scheme was approved.
Both asks are about the same underlying problem: the reverse flip created a technical gap between when shares were legally "created" and when the capital behind them was actually committed, and Zepto wanted SEBI to look through the form to the substance.
The Answer : SEBI's Rejection
SEBI didn't. By letter dated April 4, 2025, the regulator declined the exemption outright. The DRHP states it plainly: SEBI "has not acceded to the request for the exemption." No partial relief, no alternative accommodation on record, a closed door.
That rejection has a direct, quantifiable consequence. SEBI ICDR Regulations require promoters to hold at least 20% of the fully diluted post-Offer share capital, locked in for 18 months, as Minimum Promoter's Contribution, the regulatory mechanism that forces founders to keep meaningful skin in the game after a company lists. With the exemption denied, Zepto's promoters, Aadit Palicha, Kaivalya Vohra, and their family trusts, hold in aggregate 2,327,948,161 equity shares, which comes to 18.47% of the fully diluted post-Offer capital. That's short of the 20% bar by roughly 1.5 percentage points, not a rounding error, a real regulatory shortfall triggered directly by the exemption SEBI refused to grant.
The Patch : Three VCs Doing What The Founders Couldn't
SEBI ICDR Regulations have a built-in fix for exactly this situation, and Zepto used it. Under Regulation 14, any shareholder holding at least 5% of post-Offer capital can contribute shares to cover a promoter contribution shortfall, without being classified as a promoter themselves. Three of Zepto's investors, Nexus Ventures VI Holdings LLC, Glade Brook Private Investors XXXIV LP, and StepStone VC Zepto LLC, have agreed to do exactly this, via consent letters dated December 17 and December 23, 2025 (two letters on the latter date). Their combined contribution, termed "PC Shortfall Shares" in the filing, is capped at 10% of post-Offer capital. The exact number of shares is still blank in the current draft, to be filled once the Offer Price is set.
These three funds explicitly do not become promoters as a result, and the filing says so twice for emphasis. But their shares now carry the same 18-month lock-in a promoter's would. In practical terms: the mechanism designed to prove founders have enough at stake to stay committed through a rocky post-listing period is, for roughly a tenth of the required contribution, actually being met by outside financial investors instead of the people running the company.
This is not a violation of anything. It's a compliant, disclosed use of a regulatory carve-out built for exactly this scenario. But it's worth saying plainly rather than letting it pass as a footnote: the founders asked for a shortcut, didn't get it, and are now relying on their own investors to cover what the rules require of them directly.
The Desk View
Our desk price for Zepto remains ₹28.50 ; this isn't a valuation story, it's a governance one. What it does change is how we'd frame risk for a buyer thinking about the 18-month period after listing. Once that lock-in expires, the shares held by Nexus, Glade Brook, and StepStone become freely tradeable at the same time as the promoters' own locked shares, meaning a meaningful chunk of supply hits the market from investors who took on this obligation as a structural favor, not out of long-term conviction the way a founder's lock-in is meant to signal. We'd treat the 18-month mark after listing as a real overhang date to watch, not just a formality.
FAQs
Why do Zepto's promoters hold less than the required 20% minimum promoter contribution? Because SEBI rejected an exemption Zepto sought in January 2025 that would have let certain Scheme-linked shares count toward that threshold. Without the exemption, promoters' holding of 18.47% falls short of the 20% regulatory bar.
Did SEBI reject Zepto's IPO application? No. SEBI rejected a specific, narrower exemption request related to promoter contribution rules, by letter dated April 4, 2025. It did not reject or block the IPO itself; the DRHP process has continued since.
Who is covering Zepto's promoter contribution shortfall? Three venture capital investors, Nexus Ventures VI Holdings LLC, Glade Brook Private Investors XXXIV LP, and StepStone VC Zepto LLC, have agreed to contribute "PC Shortfall Shares" to make up the gap, capped at 10% of post-Offer capital combined. They are not classified as promoters.
What is the Zepto unlisted share price today? Our desk price is ₹28.50. Check current pricing with our desk.
What We Can And Cannot Stand Behind
Primary-sourced, confirmed directly from the SEBI-hosted UDRHP dated June 8, 2026 : the Scheme of Arrangement dates and structure, the January 22, 2025 exemption application and its exact terms, the April 4, 2025 SEBI rejection and its wording, the 18.47% promoter holding figure, the identities of the three PC Shortfall Shares contributors and their consent letter dates, and the 10% cap on their combined contribution.
Not yet disclosed : the exact number or percentage of PC Shortfall Shares each of the three investors will contribute; this is left blank in the current draft pending the final Offer Price.
Our own interpretation, not a DRHP statement : the framing that this reflects the founders relying on investors to meet a requirement designed around founder commitment. The DRHP presents this as a compliant regulatory mechanism without characterizing it either way; the read above is our own, and a reasonable investor could see it as an unremarkable, common structural workaround rather than a meaningful signal.
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Disclaimer
This note reflects Priveq Investech Private Limited's own research based on a full-text review of Zepto Limited's Updated Draft Red Herring Prospectus – I dated June 8, 2026. It is not investment advice and does not allege any wrongdoing or regulatory violation by Zepto Limited; using the promoter contribution shortfall mechanism under SEBI ICDR Regulations is fully compliant and disclosed. Priveq transacts as a counterparty in the unlisted shares discussed in this piece, including Zepto, and may hold or deal in these shares before, during, or after publication. Readers should independently verify all figures against Zepto's final Red Herring Prospectus and Prospectus before making any investment decision.