Zetwerk’s Revenue Update and IPO Plans

Zetwerk, a B2B e-commerce unicorn, is on the verge of filing for an initial public offering (IPO) as its revenue outlook has changed in FY25. Despite facing a decline in revenue, the company has successfully managed to decrease its losses during this timeframe.

According to consolidated financial statements from the Registrar of Companies (RoC), Zetwerk’s gross revenue dropped by 11%, standing at Rs 12,798 crore in FY25 compared to Rs 14,443 crore in FY24. As a B2B manufacturing and construction marketplace, Zetwerk earns its revenue mainly from trading, manufacturing services, and construction and project contracts.

Revenue Breakdown for Zetwerk in FY25

Revenue from trading activities, which constitutes 58% of the total income, experienced a 20% decline, falling to Rs 7,706 crore in FY25. In contrast, revenue derived from manufacturing services saw a growth of 33.5%, reaching Rs 2,682 crore. Income from construction and project contracts decreased by 19% to Rs 2,242 crore, while other income remained at Rs 535 crore in FY25.

When considering non-operating income, Zetwerk’s total income amounted to Rs 12,981 crore in FY25, a decrease from Rs 14,612 crore in FY24.

Expense Analysis for Zetwerk

On the expense side, material costs comprised over 85% of the total expenses, falling by 17% to Rs 11,232 crore in FY25 from Rs 13,467 crore in FY24. Conversely, employee benefit expenses rose by 12% to Rs 517 crore, while subcontracting expenses climbed by 16% to Rs 250 crore. Finance costs remained stable at Rs 450 crore, and other expenses added Rs 670 crore during the year.

Overall, Zetwerk was able to reduce its total expenses by 12% to Rs 13,196 crore in FY25, down from Rs 15,001 crore in FY24. Consequently, the expense-to-revenue ratio improved slightly to 1.03 from 1.04 the previous year.

Loss Reduction and Financial Improvements

With the decline in gross merchandise value (GMV), procurement costs also decreased, and the company significantly cut exceptional items. As a result, Zetwerk trimmed its losses by 60%, reporting Rs 371 crore in FY25 compared to Rs 918 crore in FY24. Notably, the company recorded a positive EBITDA of Rs 145 crore during this period, and its ROCE and EBITDA margins improved to -0.68% and 1.13% respectively.

Balance Sheet Developments

On the balance sheet, Zetwerk’s cash and bank balances surged to Rs 1,908 crore in FY25, a notable increase from Rs 1,150 crore the previous year. The company reported current assets worth Rs 7,840 crore during this period.

Funding and IPO Prospects

Zetwerk has secured a total of $889 million in funding to date, with prominent investors including Greenoaks, Peak XV Partners, Lightspeed Venture Partners, and Accel. Last April, Zetwerk expressed intentions to pursue a public listing within a 12 to 24 month timeframe.

The company is anticipated to file its draft prospectus via the confidential route this year for its $750 million IPO, which is expected to be one of the significant public market debuts for an India-based manufacturing enterprise.