Kiranakart Technologies Private Limited can now proceed with becoming the holding company of Zepto, a unicorn in quick commerce, in line with the board of directors and shareholders’ resolution, according to an order from the National Company Law Tribunal (NCLT).
Earlier on 9 January, the NCLT order said, “The Board of Directors of the Petitioner Company believes that the Scheme is in the best interests of the entity and their respective stakeholders including its shareholders, employees, and creditors.”
Before this, Zepto was a subsidiary of Singapore-based Kiranakart Pte. Ltd.
The internal suggestions were approved by the company’s board of directors on 3 October 2024.
The company’s approval to relocate its base back to India comes before its initial public offering (IPO) later this year. Zepto has chosen Goldman Sachs, Morgan Stanley, and Axis Capital as its bankers and intends to generate $400–$500 million through its first public offering (IPO), according to an exclusive disclosure in September 2024.
As originally revealed on 2 January, Zepto also created a new marketplace organisation in an attempt to simplify its operations. In fact, the NCLT order said that the advantages of the Indian entity’s merger will help the corporation’s business structure be optimised.
The NCLT order added, “rationalisation of the group structure by reducing the number of legal entities…to be more aligned with the business objective to achieve more business synergies, assist in faster decision making, ensure significant cost savings, creation of a focused platform for future growth.”
The regulation states that by streamlining the holding structure, further fundraising from both domestic and foreign investors will be possible.
In the lead-up to its IPO, the company raised over Rs 2,900 crore from domestic investors like Motilal Oswal and others in order to increase local participation.
In addition to simplifying decision-making and fundraising negotiations, the NCLT order said, “The reverse flip will eliminate administrative functions and multiple record keeping functions, which will help reduce administrative, managerial, and other common expenditures considerably, which will augur well for the firm’s financial health.”
The NCLT further determined that the Indian corporation would not require a no objection certificate (NOC) from the Reserve Bank of India (RBI), in contrast to several previous reverse flips of a similar type.
The development follows two rounds of fundraising in which Zepto raised $1.35 billion to compete in the highly competitive quick commerce industry against larger, publicly traded rivals like Zomato, which also operates Blinkit, and Swiggy, which operates Swiggy Instamart.
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