FMCG distributors’ body urges Sebi to pause loss-making q-comm IPOs

New Delhi: Fast-moving consumer goods distributors’ body AICPDF has urged the market regulator Sebi to pause the Initial Public Offerings (IPO) of loss-making quick-commerce companies.

In a representation, the All India Consumer Products Distributors Federation (AICPDF) has urged Sebi “to consider immediate measures including a temporary pause on IPO approvals” for quick-commerce and closely related e-commerce companies until ongoing proceedings in the Competition Commission of India are conclusively resolved.

It has urged the Sebi to take urgent regulatory action to protect small retail investors and India’s retail trade ecosystem from the risks posed by loss-making quick-commerce and e-commerce companies seeking public listings, said AICPDF, which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets across India.

“Several quick-commerce companies continue to operate with large cumulative losses, negative operating cash flows, and unproven unit-level profitability. Their business models are sustained primarily through repeated infusions of private capital, which are used to fund consumer subsidies, discounts, and capital-intensive dark-store and logistics infrastructure,” it said.

Despite the absence of demonstrated profitability, valuations are often built on gross merchandise value and market share rather than earnings or free cash flow, AICPDF added.

Recent listings in the sector by Zomato and Swiggy illustrate this trend. “Both companies listed after years of sustained losses, with IPO structures allowing significant exits by early shareholders. Large venture and institutional investors monetised their stakes either at the time of listing or through post-listing sales, even as the companies continued to report substantial losses and negative operating cash flows,” it said.