Strong Brand – Trusted Name
Meesho, an asset-light e-commerce platform, was promoted by Vidit Aatrey and Sanjeev Barnwal with backing from private equity and venture capital investors including SoftBank, Prosus, Peak XV, and Elevation Capital.
Meesho is a value-focused e-commerce platform competing with deep-pocketed players like Amazon and Flipkart. It operates as a multi-sided technology platform driving e-commerce in India by connecting four key stakeholders – consumers, sellers, logistics partners, and content creators.
Details of the IPO:
Meesho is launching a fresh issue of Rs. 4,250 crore along with an offer-for-sale (OFS) of up to 17.57 crore shares. The top OFS seller is Elevation Capital, offering up to 5.5 crore equity shares. The average cost of holding for these shares is slightly over Rs. 3 per share, compared with the OFS price of Rs. 111 per share.
| Name of the Company | Meesho Ltd. | |
| Issue Open | 03-12-2025 | |
| Issue closes | 05-12-2025 | |
| Issue Size | Rs Crore | |
| Fresh issue | 4,250 | |
| Offer for sale | 1,171 | |
| Face Value per share | Re. | 1 |
| Upper issue price band | Rs | 111 |
The company operates a key subsidiary, Meesho Technologies Pvt. Ltd. (MTPL), to support scale, reliability, and data/AI workloads. Proceeds from the fresh issue are planned to be used as follows:
- Marketing and brand building through MTPL – Rs. 1,020 crore to be infused into MTPL.
- Investment in cloud infrastructure through MTPL – Rs. 1,390 crore to be infused into MTPL.
- Payment of salaries for existing and replacement hires in Machine Learning, AI, and technology teams – Rs. 480 crore for AI and technology development undertaken by MTPL.
- Funding inorganic growth, strategic initiatives, and general corporate purposes.
Financial Performance:
Meesho has recorded a compound annual growth rate (CAGR) of 28% in revenue, rising from Rs. 5,735 crore in fiscal 2023 to Rs. 9,390 crore in fiscal 2025. For the first six months of fiscal 2026, revenue grew 29% to Rs. 5,578 crore. Despite this strong revenue growth, cash losses are mounting. Over the last three and a half years, Meesho has incurred significant cash losses of Rs. 2,413 crore. The losses would have been even higher if not for substantial income from bank interest and gains from the sale or valuation of investments.
(Rs. in crore)
| Financials for the year ended | Sep-25 (6M) | Sep-24 (6M) | Mar-25 (12M) | Mar-24 (12M) | Mar-23 (12M) | CAGR (%) |
| Revenue from operations | 5,578 | 4,311 | 9,390 | 7,615 | 5,735 | 28.0% |
| Other income | 280 | 234 | 511 | 244 | 163 | 77.1% |
| Loss before tax | 433 | 24 | 108 | 315 | 1,671.9 | – |
| Exceptional item | 137 | 51 | 1,346 | 13 | – | – |
| Tax impact | 130 | 2,438 | 2,487 | – | – | – |
| Net loss after tax | 701 | 2,513 | 3,942 | 328 | 1,671.9 | – |
Key Risk Factors – Meesho Ltd.
Meesho has a strong brand and a technology-driven, asset-light platform. However, its business model faces key risks, including customer retention, dependence on third-party logistics, rapid technological changes, and intense competition from well-funded organized players.
Profitability Challenges:
Many high-valuation e-commerce IPOs continue to report net losses due to heavy investments in infrastructure, technology, marketing, and customer acquisition. IPOs of e-commerce companies are sometimes priced on optimistic growth narratives rather than a solid profit track record.
Meesho’s market capitalization is expected to exceed Rs. 50,000 crore, which is 5.34 times its fiscal 2025 revenue. Its $5.6 billion valuation is lower than FSN e-commerce (Nykaa), valued at around $7 billion, while Walmart-backed Flipkart’s valuation is estimated to be nearly ten times higher than Meesho.
Many experts value loss-making e-commerce companies based on revenue growth and enterprise value (EV) to revenue multiples. For Meesho, with revenue growth of 28%, its EV is 5.3 times revenue, which aligns with the typical 5–7 times revenue valuation range.
IPO Justification and Listing Premium:
To justify the IPO price and any potential listing premium, Meesho would need to sustain revenue growth of 25–30% year-on-year on a higher base. However, predicting such growth in the current uncertain environment remains challenging.
Disclaimer:
The writer is not a SEBI-registered analyst. He and his friends or relatives may or may not participate in the IPO. This article is intended purely for educational purposes. Investors are advised to consult their financial advisors before making any investment decisions. The grey market premium should be viewed only as an indicator and not as a reliable benchmark for listing performance.
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