Zepto Ltd. faced a 68% cut to its valuation during its initial public offering roadshow last month, prompting the Indian rapid-commerce firm to delay its listing, according to people familiar with the matter. SBI Funds Management Ltd., India's largest mutual fund, and other domestic money managers were willing to pay around 17-18 rupees a share in Zepto's anchor allocation, valuing the company at about $2.3 billion. That's well below the 55 rupees a share at which the stock changed hands in the unofficial market in March, implying a valuation of about $7.2 billion, slightly above Zepto's last private funding round in October. Over the weekend, Zepto said it was putting its IPO plans on hold for a few quarters and would instead raise capital through a private share sale.

Several prominent Indian investors had bought Zepto shares at 40.13 rupees apiece before the IPO process began, including Motilal Oswal Financial Services Ltd. founders Motilal Oswal and Raamdeo Agrawal, Max Healthcare Institute Ltd. Chairman Abhay Soi, former Britannia Industries Ltd. Managing Director Varun Berry, and actor Abhishek Bachchan. Zepto's funding round in October valued its shares at about 52 rupees apiece, which fell as low as 22 rupees in July before recovering to trade at about 27 rupees currently.