The All India Consumer Products Distributors Federation (AICPDF), which represents over 450,000 distributors, raised its concerns in a letter reported in media
India’s largest federation of fast-moving consumer goods (FMCG) distributors has written to the Securities and Exchange Board of India (Sebi) urging the market regulator to pause or tighten approvals for initial public offerings (IPOs) by loss-making quick commerce companies, citing risks to investors and disruption to India’s retail ecosystem.
The All India Consumer Products Distributors Federation (AICPDF), which represents over 450,000 distributors and more than 13 million kirana and retail outlets, raised its concerns in a letter reported in media. The AICPDF’s representation comes amid news that quick commerce platform Zepto has made a confidential IPO filing with Sebi, seeking to raise approximately USD 1.22 to 1.3 billion ahead of a planned public listing in mid-2026.
In its letter, the distributors’ body said its members have faced “sustained and severe market disruption” due to deep discounting, predatory pricing, and cash-burn-led market capture strategies funded primarily through repeated injections of private capital. These practices, it argued, have harmed traditional trade channels and undermined long-established FMCG distribution networks.
The group has already lodged formal complaints with the Competition Commission of India (CCI) alleging anticompetitive conduct by quick commerce firms, including Blinkit, Zepto and Instamart. It said proceeding with IPO approvals while these investigations remain unresolved raises “serious concerns regarding material disclosure, regulatory arbitrage and investor protection”.
The AICPDF also criticised what it described as an “exit-driven IPO pattern” in the sector. It noted that quick commerce players often list publicly after years of losses and negative operating cash flows, and rely on offer-for-sale (OFS) components that allow early institutional investors to monetise stakes at scale without raising growth capital for the business. This practice, the trade body claimed, places disproportionate risk on small retail investors who may lack the sophistication to assess unproven, loss-making business models.
According to the letter, many quick commerce companies operate with large cumulative losses, unproven unit economics and business models sustained by heavy subsidies and discounting, rather than profitability or free cash flow. Valuations built on gross merchandise value and market share, rather than earnings, were cited as part of the problem.
To address these issues, the AICPDF has urged Sebi to consider a temporary moratorium on new IPO filings or approvals by quick commerce and closely related ecommerce entities, including those that have already submitted applications. It is also seeking stricter conditions on OFS components, enhanced disclosures in red herring prospectuses for cash-burn companies, use-of-proceeds safeguards and enhanced investor protection measures.
The call for regulatory intervention underscores broader tensions between India’s expanding digital commerce ecosystem and traditional retail trade. Quick commerce platforms, which promise delivery of goods in minutes, have grown rapidly in recent years through deep discounting and aggressive market expansion, challenging kirana stores and distributor networks that have long formed the backbone of FMCG distribution in India.
Industry analysts say balancing innovation and investor protection will be a key focus for Sebi and policymakers in 2026, especially as more tech-driven companies, including quick commerce, e-tailers and direct-to-consumer brands, prepare to tap public markets. With existing IPOs by legacy tech companies like Swiggy and Zomato having already provided lucrative exits for early backers despite years of losses, scrutiny of future filings is likely to intensify among stakeholders across India’s retail and capital markets.
