The All India Consumer Products Distributors Federation on Monday Cautioned Retail Investors Against Investing in IP Os of “Persistent”

The industry body, representing 4.5 lakh FMCG distributors, also called on FSSAI to prescribe mandatory storage standards for quick-commerce dark stores. Referring to Zepto’s recent valuation drop, the Federation said the gap between the valuation sought by the company and that considered appropriate by institutional investors raises questions deserving careful regulatory scrutiny before any public issue proceeds. “AICPDF has urged SEBI and the Government of India not to permit any IPO of a persistent loss-making quick-commerce company without the highest standards of scrutiny, transparency and investor protection, the statement said.

It added that “aggressive discount-led competition” from quick-commerce platforms has placed enormous pressure on India’s traditional retail ecosystem, with lakhs of neighbourhood kirana stores, wholesalers, distributors and small businesses experiencing severe financial stress. The Federation also expressed concern over reports of delayed payments to suppliers, vendors and business partners associated with loss-making quick-commerce companies. “India cannot claim success by creating one digital job while destroying multiple sustainable livelihoods across its traditional retail economy, it added.

AICPDF has urged the Ministry of Finance, the Ministry of Commerce & Industry and SEBI to conduct a comprehensive review of valuation methodologies adopted by persistent loss-making companies seeking IPO approval, and to apply “significantly stricter scrutiny” before permitting IP Os of companies yet to demonstrate sustainable operational profitability. It also called for a National Policy for the Protection of General Trade to ensure a level playing field between digital commerce and neighbourhood retail. Noting that many dark stores operate in congested premises where 60,000 to 70,000 SK Us are stored within limited floor space, leading to unsafe storage practices and increased risks of food contamination, pest infestation and compromised hygiene, the Federation suggested FSSAI prescribe a minimum requirement of 20,000–25,000 square feet for such facilities, subject to scientific validation. “AICPDF is prepared, if necessary, to organise a peaceful nationwide agitation, including a demonstration before SEBI Headquarters, demanding stronger regulatory accountability and stricter IPO norms for persistent loss-making companies, it claimed.”””