Zepto co-founders got ED summons in FEMA case, firm's IPO draft documents say | What we know | India News

Zepto co-founders Aadit Palicha and Kaivalya Vohra received summons from the Enforcement Directorate (ED) in April this year in connection with proceedings under the Foreign Exchange Management Act (FEMA).The revelation came in the Initial Public Offering (IPO)-bound quick commerce firm’s updated Draft Red Herring Prospectus (UDRHP), in the section on risk factors.The ED sought information and documents related to foreign investments, financials, and the company's business.The updated DRHP for Zepto IPOAccording to the updated DRHP submitted in Monday, the ED sought details including foreign and overseas investments, audited financial statements, shareholding patterns, information on loans and guarantees, income tax returns, bank accounts, immovable properties, and a note on Zepto's business model.The summons, dated April 8, 2026, required the founders to appear before the ED to furnish relevant documents and information."Two of our promoters, namely, Aadit Palicha and Kaivalya Vohra, had received summons, each dated April 8, 2026, from the Directorate of Enforcement, Ministry of Finance, Government of India, requiring them to appear before the ED, to produce certain documents and/or provide information in relation to our company and/or themselves," the document stated.Information sought pertained to "details of foreign investments and overseas investments; audited balance sheets since Financial Year 2020-2021; owned immovable properties; shareholding pattern; details of loans/guarantees; income tax returns and bank accounts; note on our business model, in relation to proceedings under the Foreign Exchange Management Act, 1999," it further detailed.According to Zepto, Vohra appeared before the ED on April 17, 2026 and April 22, 2026, and Palicha on April 20, 2026 and May 15, 2026, respectively, in compliance with the summons,."As on the date of this Updated Draft Red Herring Prospectus-I, they have provided relevant information and documents as requested by ED pursuant to the summons, as well as follow-on information requested by the ED further to their interactions, including certain details in relation to our holding structure, the scheme, and additional information in relation to our business such as business agreements and invoices," it said.Zepto's draft IPO document said that as on the date of the updated Draft Red Herring Prospectus, it has not received any further communication from the ED after submission of the responses, but added, "we cannot assure you there will not be future inquiries or that these could escalate to investigations, legal proceedings or any possible penalties".Zepto IPOZepto filed updated draft papers with the markets regulator SEBI to raise ₹8,010 crore through a fresh issue of shares as part of its proposed IPO.Along with the fresh issue, there will be an Offer For Sale (OFS) of ₹11.35 crore in equity shares by existing shareholders, mostly early institutional investors, according to the UDRHP.The company's promoters, including co-founders Aadit Palicha and Kaivalya Vohra, will not dilute any of their equity in the IPO.According to people familiar with the matter quoted by PTI, the overall issue size is estimated at around ₹11,000 crore. Zepto is expected to launch the IPO in July.Out of the total OFS of up to 113,466,566 equity shares, the promoter group, which also includes Lazarus Trust and The Vohra Trust, is entirely skipping the share sale. Lazarus Trust and The Vohra Trust are private family trusts settled by Aadit Palicha and Kaivalya Vohra, respectively.As per the UDRHP, promoters hold 2,327,948,161 equity shares of face value ₹5, representing 18.47 per cent of the issued, subscribed and paid-up equity share capital of Zepto.Instead, Nexus Ventures will be the largest selling shareholder, offloading over 8.77 crore shares through two of its entities.It will sell the largest chunk of up to 57,357,141 equity shares, while Nexus Ventures VII Holdings, LLC will divest up to 30,398,907 equity shares.Razor Ventures Zepto LLC will offer up to 9,364,174 equity shares, and Contrary ZEP Holdings LLC will sell up to 7,801,378 equity shares.Additionally, Kaiser Foundation Hospitals will offload up to 4,385,912 shares, and Kaiser Permanente Group Trust will sell up to 4,159,054 equity shares.Quarterly loss narrows, widens year-on-yearZepto narrowed its net loss to ₹1,538.67 crore in Q4 FY26, down from ₹1,831.91 crore in Q4 FY25.For the whole 2025-26 fiscal year, Zepto's loss widened to ₹5,905.19 crore, compared to a loss of ₹4,699.71 crore in the previous fiscal.Zepto's revenue from operations surged 75.26 per cent to ₹7,497.64 crore in Q4 FY26, from ₹ 4,278.06 crore in Q4 FY25.Revenue from operations more than doubled to ₹22,623.58 crore in FY26, as against ₹11,109.94 crore in FY25.During Q4 FY26, Zepto handled 21 crore total orders, averaging 23.3 lakh per day. Over the entire fiscal year, the platform processed 64 crore orders, averaging 17 lakh orders per day.As of March 31, 2026, Zepto had 4.79 crore annual transacting users (ATU), representing a 25 per cent year-over-year growth. Zepto's total dark store count stood at 1,139.Proceeds from the fresh issue will be channelled into expanding Zepto's dark store network across new and existing geographies, covering lease rentals for current stores, and investing in cloud and technology infrastructure.The funds will also support marketing initiatives and inorganic growth opportunities.Upon listing, Zepto will directly battle listed peers, Eternal and Swiggy, on the bourses, competing against their respective quick-commerce arms, Blinkit and Instamart.Originally incorporated as Kiranakart Technologies Pvt Ltd in December 2020, the firm was rebranded to Zepto Pvt Ltd in April 2025 before converting into a public limited company in December 2025.