The All India Consumer Products Distributors Federation (AICPDF) has made a formal appeal to the Securities and Exchange Board of India (SEBI), urging the market regulator to temporarily stop the approval of Initial Public Offerings (IPOs) for quick-commerce and related e-commerce companies. This call for action comes amidst ongoing investigations by the Competition Commission of India (CCI).
Core Concerns: Losses, Valuations, and Investor Risk
The distributors' body, which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets across the country, raised serious concerns about the financial health of these companies. In its representation, AICPDF highlighted that several quick-commerce platforms operate with substantial cumulative losses and negative operating cash flows, lacking proven unit-level profitability.
It argued that their business models are primarily sustained by repeated infusions of private capital. This capital is used to fund consumer subsidies, deep discounts, and expensive dark-store and logistics networks. The federation pointed out that despite no clear path to profitability, company valuations are often based on gross merchandise value and market share rather than traditional metrics like earnings or free cash flow.
"India's capital markets must not become exit routes for business models that are structurally loss-making and sustained only by continuous cash burn," the body stated. It warned that when early investors exit through IPOs while losses continue, the risk is unfairly transferred to small retail investors.
Precedent and Pending Scrutiny
AICPDF cited the example of recent listings in the sector, such as Zomato and Swiggy, to illustrate its point. It noted that these companies went public after years of sustained losses, with IPO structures that allowed significant exits for early shareholders. Large venture and institutional investors were able to monetize their stakes during or after the listing, even as the companies reported continued substantial losses.
Compounding the issue are the active proceedings before the Competition Commission of India. AICPDF has already filed formal complaints with the CCI, alleging predatory pricing and anti-competitive conduct by quick-commerce platforms. "These proceedings remain active and unresolved, with the CCI having sought additional evidence," the federation said.
It emphasized that moving forward with IPO approvals while competition-law investigations are ongoing raises serious questions about material disclosure, regulatory arbitrage, and ultimately, investor protection.
A Plea to Protect Retail Ecosystem
The appeal frames the issue as a dual threat: to the financial security of small investors and to the traditional retail backbone of India. AICPDF National President Dhairyashil Patil stated, "At the same time, predatory pricing funded through investor money is destroying lakhs of kirana livelihoods."
He stressed that SEBI has a constitutional responsibility to ensure transparency, fairness, and investor protection. The federation's plea is for the regulator to intervene decisively before what it sees as irreversible damage is done to both the investing public and India's vast retail trade ecosystem.
The ball is now in SEBI's court to consider this request for a regulatory pause, balancing the need for market access with its mandate to safeguard investor interests and market integrity.
