Zepto has faced fresh regulatory action after the Food Safety Division of Karnataka’s Food Safety and Drug Administration Department sealed a major warehouse in Bengaluru’s Hoskote over alleged food safety violations.
The action has added to the regulatory pressure on the quick-commerce company as it continues to manage operational scrutiny, financial losses and a paused initial public offering plan.
Zepto warehouse sealed after special inspection
Officials conducted a special inspection drive at the facility under the guidance of Karnataka Health and Family Welfare Minister UT Khader. The inspection found issues related to product labelling, misbranding, food storage and food handling conditions.
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According to the department, the warehouse had non-compliant product labelling and misbranded products. Officials also observed unhygienic conditions in areas used for storing and handling food products.
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The facility was sealed under provisions of the Food Safety and Standards Authority of India, or FSSAI. The authorities also issued a notice to the warehouse. The case has been recommended before the adjudicating officer for further legal action.
The department said strict legal action would be taken against food business operators that violate food safety regulations. It also indicated that more special inspection drives would continue across the state.
Warehouse operated with Nippon Express
The sealed site is a large Zepto warehouse in Hoskote. It is operated by Zepto in partnership with global logistics company Nippon Express. The facility is used to handle food products, fast-moving consumer goods and household items.
For a quick-commerce company, warehouse compliance is important because these facilities support the rapid movement of products to dark stores and customers. Any issue involving labelling, storage or hygiene can therefore draw attention from food safety authorities.
A Zepto spokesperson said the company fully cooperated with the authorities during the inspection. The spokesperson added that Zepto was taking necessary steps to address the observations made by the officials.
Regulatory scrutiny of quick-commerce warehouses
The action in Bengaluru follows similar scrutiny of quick-commerce operations in other parts of India. Maharashtra authorities raided Zepto and Blinkit dark stores last year. Telangana authorities also raided a Blinkit warehouse in 2024.
In Bengaluru, authorities have separately intensified checks on eateries and hotels over the sale and use of expired food products. The latest action shows that food safety checks are also extending to large warehouses supporting online grocery and quick-commerce deliveries.
Zepto, founded in 2021 by Aadit Palicha and Kaivalya Vohra, is headquartered in Bengaluru. The company has raised total funding of about $2.4 billion and has built its business around fast delivery of groceries, food, household products and other daily-use items.
Zepto IPO plan remains on hold
The regulatory development comes at a crucial time for Zepto’s business and fundraising plans. The company had filed draft papers for an IPO but later paused the plan. It is now looking to raise Rs 1,000 crore through a pre-IPO round.
The proposed IPO plan included a fresh issue of up to Rs 8,010 crore. Existing investors were also expected to sell up to 11.35 crore shares through an offer for sale. Zepto was targeting a valuation of around $4.5 billion.
The IPO process was paused for two to three quarters amid valuation concerns. The company’s financial performance has also remained under close watch. In FY26, Zepto’s net loss increased to Rs 5,095 crore from Rs 4,697 crore in FY25. Its operating revenue nearly doubled to Rs 22,624 crore during the same period.
What lies ahead for Zepto
Zepto will now need to address the observations raised by Karnataka’s food safety authorities and follow the legal process linked to the