Mumbai: Top domestic mutual funds have pushed back against the valuations sought by quick commerce startup Zepto for its proposed initial public offering (IPO), multiple people told ET, potentially complicating the company‘s plans for an early launch of its much-awaited issue.

The asset managers, among the biggest investors in recent IPOs, have told Bengaluru-based Zepto’s representatives in recent discussions that they would not be comfortable subscribing to the issue even at the lower valuation being considered by the company, three people familiar with the matter told ET.

Zepto is said to have offered to cut its IPO valuation expectations to around $4-5 billion, below the peak valuation of $7 billion in October 2025, when the company secured a $450-million funding from US pension fund CalPERS.

Sources said the top mutual funds and large domestic insurers are seeking valuations 30-40% below even the reduced IPO valuation of $4-5 billion, sending the bankers and one of Zepto’s prominent investors scrambling to persuade money managers to meet the company mid-way. They have also stepped up efforts to line up support from a wider section of deep-pocketed High Networth Investors (HNIs) and large family offices.

An email query to Zepto went unanswered until the publication of this report.

Zepto is aiming to launch its IPO of up to ₹8,010 crore over the next two weeks. Sources said the company hopes to conclude negotiations with the asset managers by Tuesday, though mutual funds have yet to agree on its offer.
“Most of the large mutual funds are yet to confirm their participation at least till the weekend because of serious differences over valuations,” said one of the people in the know on condition of anonymity.The participation of the domestic funds and insurers is considered crucial for the success of the IPO as these cash-flush institutions have been the largest participants in anchor books and pre-IPO funding rounds in recent share sales. Their dominant presence has also given them an upper hand in share sale negotiations with companies with some of the top funds even having a significant say in IPO pricings.

“What we are saying is if you can get the participation of the majority of the other big funds, we will also look into it again,” said a top official with a large mutual fund, who did not want to be named because of the sensitive nature of the discussions.

Fund managers said Zepto wanted to benchmark its IPO valuation against listed rivals Eternal and Swiggy. Investors, however, did not buy the logic because Zepto lacks a food delivery business, which forms a key part of both companies’ operations and valuations. Zepto operates only in the ultra-competitive quick commerce market spanning groceries, electronics and other everyday items.

Fund managers are also wary of agreeing to higher valuations following the post-listing share price performance of some of the new-age businesses. For instance, Swiggy, which listed in November 2024, is still trading below its IPO price. The stock is at ₹251.50, about 35% below the IPO price of ₹390 apiece. In some of the new-age company issuances in the past, mutual funds have been slammed for subscribing to these IPOs at peak valuations.

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Chipotle Mexican Grill opened its first restaurant in Mexico this month as part of the fast-casual chain’s international growth strategy.

The new location opened on July 16 in San Pedro Garza García, Nuevo León, part of the Monterrey metropolitan area, and is being operated in partnership with restaurant operator Alsea, according to a news release from Chipotle.

“We are entering Mexico with deep respect for the country’s culinary heritage and a commitment to delivering the Chipotle experience with excellence,” Scott Boatwright, CEO of Chipotle, said in a statement. 

“Our research has reinforced our belief that there is strong interest in high-quality, freshly prepared food served with the customization and convenience that Chipotle offers.”

CHIPOTLE RIVAL GUZMAN Y GOMEZ MEXICAN KITCHEN CLOSES ALL US RESTAURANTS

Chipotle and Alsea plan to open additional locations in Nuevo León later this year, followed by an expansion into Mexico City in 2027. 

The restaurant is the first to open under a development agreement the companies announced in April 2025.

Alsea runs several thousand restaurants from global quick-service, coffee shop and full-service brands in many countries in Latin America and Europe, according to Chipotle.

CHIPOTLE CEO ALLEGEDLY SUGGESTS COMPANY WOULD KEEP RAISING PRICES AND ‘LEAN INTO’ CUSTOMERS MAKING OVER $100K

The new restaurant offers Chipotle’s standard menu of customizable burritos, bowls, tacos, salads and quesadillas. Many ingredients are sourced from regional suppliers, according to the company.

Chipotle said the Monterrey area was selected because of its “strong economy, growing population” and position as a major business hub. 

“Bringing Chipotle to Mexico is an important step in our growth and portfolio diversification strategy,” Christian Gurría, CEO of Alsea, said in a statement. “We are introducing an iconic brand with a differentiated value proposition that has resonated with millions of guests around the world, and we are confident it will be warmly welcomed by Mexican consumers.”

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CHIPOTLE TO OPEN MEXICAN LOCATIONS FOR THE FIRST TIME IN 2026

As of March 31, Chipotle operated more than 4,100 restaurants worldwide.

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The restaurant chain expects to open between 350 and 370 new locations in 2026. Its international footprint includes restaurants in Canada, Europe and the Middle East, with additional openings planned in South Korea and Singapore.

Chipotle could not immediately be reached by FOX Business for additional comment.

FOX Business’ Aislinn Murphy contributed to this report.

Sazerac isn’t taking no for an answer.

The maker of BuzzBallz cocktails and Buffalo Trace bourbon has sent a letter to a group of Brown-Forman BF.B 1.48%increase; up pointing triangle shareholders asking them to reconsider a $15 billion buyout offer that had been rebuffed. The group—Class A shareholders—includes members of the Brown family, descendants of the company’s founder who currently control its voting power.

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