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AICPDF has urged SEBI to pause IPO approvals for loss-making quick-commerce and related e-commerce companies until pending cases before the Competition Commission of India are settled. The distributors body flagged concerns over persistent losses, negative cash flows, and valuation practices based on market share rather than profitability. It pointed to recent listings by Zomato and Swiggy, where early investors exited despite continued losses. AICPDF also cited ongoing CCI probes into alleged predatory pricing and warned of risks to small investors and kirana retailers.
The All India Consumer Products Distributors Federation (AICPDF) has asked the Securities and Exchange Board of India (SEBI) to temporarily halt the approval of Initial Public Offerings by loss-making quick-commerce and related e-commerce companies. The distributors body said such a step is needed until competition-related cases pending before the Competition Commission of India (CCI) are fully resolved. Advertisement
In a formal representation to the market regulator, AICPDF said immediate regulatory measures are required to protect small retail investors and the wider retail trade ecosystem. The federation, which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets across the country, expressed concern over the risks posed by companies seeking public listings despite weak financial fundamentals.
According to AICPDF, several quick-commerce firms continue to report large cumulative losses, negative operating cash flows, and lack clear proof of profitability at the unit level. It stated that these business models are largely sustained through repeated inflows of private capital, which are used to fund heavy consumer discounts, subsidies, and capital-intensive investments in dark stores and logistics networks.
The federation also pointed out that valuations in the sector are often based on gross merchandise value and market share, rather than on earnings or free cash flow. It cited recent stock market listings by Zomato and Swiggy as examples, noting that both companies went public after years of sustained losses. AICPDF said the IPO structures enabled early shareholders to exit, while large venture capital and institutional investors monetised their holdings either at listing or through subsequent stake sales, even as the companies continued to post significant losses.
AICPDF has already lodged formal complaints with the CCI, alleging predatory pricing and anti-competitive practices by quick-commerce platforms. It noted that these cases are still under examination, with the competition regulator seeking additional information. The federation argued that moving ahead with IPO approvals during ongoing investigations raises concerns around disclosure standards, regulatory gaps, and investor protection.
The body further stated that investor-funded discounting has adversely affected traditional retail, leading to loss of livelihoods for a large number of kirana store owners. It stressed that capital markets should not be used as exit routes for business models that remain structurally loss-making.
Source PTI
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