NCLT nod for Zepto parent’s merger with Singapore unit

The National Company Law Tribunal (NCLT) has approved the merger of Kiranakart Technologies, which operates quick commerce platform Zepto, with its Singaporean affiliate entity Kiranakart Pte Ltd—a move that will help accelerate its initial public offering (IPO) plans in India this year.

Zepto’s domicile flip to India will formally complete within the next 30 days, a person aware of the matter said, adding that this was one of the fastest approvals of its kind from the tribunal.

“The scheme appears to be fair and reasonable and (it) is not in violation of any provisions of law and is not contrary to public policy,” the Mumbai bench of NCLT observed in its January 9 order.

The division bench, comprising Justice VG Bisht and technical member Prabhat Kumar, clarified that the income-tax department retains the authority to examine any tax implications arising from the merger and take necessary action.

The merger has also received approval from Singaporean authorities.

Also Read: Zepto FDI laws compliant, aims to be majority India-owned: Aadit Palicha

Zepto is aiming to file its draft IPO papers by March or April and has called a board meeting later this month to discuss the matter, as ET reported on January 4.The merger will simplify Zepto’s holding structure, improving flexibility for future fundraising from both Indian and overseas investors, the companies’ counsels told the tribunal.

“The scheme shall also enable the companies to address the competitive regulatory environment, risks and policies, better management, value consolidation and creation of shareholder’s value,” counsels Hemant Sethi, Devanshi and Tanaya Sethi of Hemant Sethi & Co said in their submission.

The merger is expected to result in significant cost savings, faster decision-making, and the creation of a focused platform for future growth, they said.

An email sent to Zepto did not elicit any response until press time Sunday.

Zepto is in process of finalising independent directors for its board as part of its IPO preparations.

“Yes, we have been told they (Zepto) want to take the company public as early as possible in the new financial year. This is being tracked closely and is the main focus internally,” a person aware of the matter said.

Zomato and Swiggy—parents of Zepto’s top rivals Blinkit and Instamart—are trading on the bourses. Much of the surge in Zomato’s stock price in 2024 has been attributed to Blinkit’s performance. Similarly, brokerages share a bullish outlook on Swiggy, aided by the Instamart business.

Zepto could become the first independent quick commerce firm in the country to go public.

ET first reported on September 7, 2024, that Zepto was in talks with bankers for a mid-2025 IPO. Its original plan was to raise at least $450 million, but that could change closer to the filing of the draft IPO papers.

Wall Street bankers including Morgan Stanley and Goldman Sachs are in talks with Zepto for its IPO, ET had reported.

Zepto closed a $350-million funding round on November 22, 2024, taking its cash pile to around $1.4 billion as it competes against rivals and new entrants like Flipkart Minutes in the fast-growing market.