MOFSL founders Motilal Oswal and Raamdeo Agrawal buy shares worth $100 million in Zepto

Motilal Oswal and Raamdeo Agrawal, founders of Motilal Oswal Financial Services Limited (MOFSL), have each bought shares worth $50 million (around Rs 425 crore) each in quick commerce startup Zepto, as reported by Moneycontrol.

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The secondary share sales amount to $100 million in total. This move comes at a time when Zepto is increasing domestic ownership to become a firm majorly owned by Indian investors.

Oswal and Agrawal have both bought shares from early backers, mostly foreign investors, of Zepto, including Rocket Internet, Lachy Groom and the others.

Apart from the current round, Motilal Oswal, the firm, is also preparing to lead a secondaries round to the tune of $250 million in Zepto, as cited in an earlier report by Moneycontrol.

As reported, the firm will pool in money from its domestic investors and buy shares from Zepto’s foreign investors to shore up domestic ownership.

Edelweiss and Hero Fincorp will also participate in the $250 million round, where shares of Zepto will potentially change hands, going from foreign investors to domestic ones.

.“As an IOCC, we now have the option to also own inventory in the quick commerce business,” Eternal CFO Akshant Goyal said in the shareholder letter. “We believe that is important, and is another concrete step towards making our business more resilient in the long term.”

However, another market leader, Swiggy Instamart, does not see it as a viable option yet.

“From an overall economics standpoint, we believe the magnitude of difference can't be more than 30-35 basis points. But it comes on the back of inventory holding on your balance sheet. So, it is a choice to be made on the commercial model,” Swiggy CFO Rahul Bothra said. 

“The commercials don’t necessarily justify for you to make any inorganic way to get there,” Bothra said. While he didn’t rule out a future transition – “we may also want to consider it…when we believe it is the right time” – he emphasised that there is “no plan in the near future.”

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