Zetwerk IPO: $550M Target Amidst $4B Valuation

B2B manufacturing startup Zetwerk is reportedly preparing to file its draft red herring prospectus (DRHP) for an initial public offering (IPO) within the next two weeks. The IPO aims to raise up to $550 million at a valuation of approximately $4 billion, according to Inc42.com.

The public issue will include a fresh issue of shares worth around $300 million, with the remaining amount coming from an offer-for-sale (OFS) component. Zetwerk is targeting a listing later this year, marking its second attempt after shelving IPO plans in February of the previous year.

Kotak Mahindra Capital, JM Financial, Avendus Capital, and the Indian units of HSBC, Morgan Stanley, and Goldman Sachs have been appointed as bankers for the IPO. This move follows Zetwerk’s initial attempt to list in February 2023, where it aimed for a $500 million IPO with a valuation close to $5 billion, before putting those plans on hold.

Founded in 2018 by Amrit Acharya, Srinath Ramakkrushnan, Vishal Chaudhary, and Rahul Sharma, Zetwerk operates as a full-stack manufacturing company, producing industrial components, electronics, renewable energy equipment, and consumer hardware. The company also manages procurement, quality checks, logistics, and delivery for its clients.

Zetwerk claims to operate over 100 production facilities across India, the US, Germany, Spain, Vietnam, and Mexico. To date, it has raised over $870 million from investors, including Greenoaks, Accel, Lightspeed India, Baillie Gifford, Khosla Ventures, and Avenir Growth.

The IPO bid coincides with a legal dispute in the US between Zetwerk and its former executive, Anirudh Reddy Edla, and his company, Ayr Energy. Zetwerk alleges that Ayr Energy secured over $250 million in orders by using information taken from Zetwerk’s internal systems, claiming losses of nearly $77 million in customer contracts due to misuse of trade secrets, breach of fiduciary duty, and unfair competition.