Two likely reasons why Zepto plans to shift 'holding company' to India from Singapore

Quick commerce company Zepto is reportedly looking to shore up its domestic shareholding with “well-known and credible” names. According to a report in Economic Times, family offices of Manipal group chief Ranjan Pai, Mankind Pharma brothers Ramesh Juneja and Rajeev Juneja, and Cipla are likely to join Zepto’s funding round.

Zepto has raised over $1 billion in the four months. It is valued at $5 billion following its $340 million fundraise on August 29. Presently, most of the shareholders in Zepto are foreign investors.

Zepto’s parent Kiranakart has also reportedly filed an application with the National Company Law Tribunal (NCLT) to move its holding company to India from Singapore . The move is said to be part of a plan to become an Indian majority-owned company over the next 12-18 months. Zepto is reportedly working with Deloitte on the migration.

There are said to be two core reasons behind this round:

* First: These family offices and HNIs will bring more confidence to mutual fund investors for the pre-IPO funding as well as improve government confidence in the operating structure.

* Second: A large Indian shareholding is said to be certainly more favourable in key government circles and among policymakers. India’s foreign direct investment (FDI) rules don’t allow foreign-funded online marketplaces to own inventory or control sellers on their platforms.

A Y Combinator alumnus, Zepto is reportedly moving its domicile to India linked to its IPO plans besides the fact that a fully domiciled local company may also gain on their optics in terms of job creation and fuelling e-commerce growth here.