E-commerce unicorn Meesho has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) through the confidential route. It is aiming to raise Rs 4,250 crore in fresh capital through an initial public offering, according to sources.
The issue size is likely to be bigger post the inclusion of the offer-for-sale(OFS) component. Meesho’s last-known valuation is $3.9 billion, as of March 2024.
Meesho joins a slew of startups that have filed IPO papers in the last few weeks, including Shadowfax, Pine Labs, Wakefit, and Curefoods, which are collectively raising nearly Rs 6,500 crore in fresh capital. More than a dozen new-age companies are readying to list on the bourses and are expected to raise a combined Rs 18,000 crore.
Founded in 2015, Meesho has carved a unique path through India’s crowded e-commerce landscape, emerging as the country’s third-largest online retail platform by gross merchandise value (GMV). According to a recent report by brokerage firm CLSA, Meesho has reached a GMV run rate of $6.2 billion for FY25.
Meesho began its journey as Fashnear, a hyperlocal fashion discovery app, but quickly pivoted upon recognising the dominance of unbranded goods in e-commerce. It then launched a platform enabling informal resellers- often homemakers and small entrepreneurs- to sell products via WhatsApp and Facebook, bypassing the need for inventory or capital investment.
Instead of targeting premium urban customers, it targeted price-sensitive consumers in Tier 2, Tier 3, and rural regions. In 2021, Meesho eliminated commission fees, making it the lowest-cost platform for online sellers. On the buyer side, the company built a lightweight app with regional language support, optimised for low-end smartphones and patchy mobile data, key to driving adoption in rural India.
Analysts at CLSA project Meesho’s market share will climb from 8.5% to 10% over the next six years, even as larger rivals Amazon and Flipkart see marginal declines.
Among the new-age companies, Groww, Shiprocket, PhysicsWallah, and Shadowfax have chosen the confidential pre-filing route. This allows firms to quietly fix compliance or disclosure gaps based on Sebi’s observations without any reputational risks. It also gives more time to prepare and market the issue, enabling firms to better align with market conditions. Sebi has allowed an 18-month window post initial observations for an IPO via the pre-filing route and 12 months to launch an IPO after final observations under the regular route.
More importantly, by deferring public disclosure, firms can shield sensitive financial and operational data from competitors, maintaining confidentiality until the IPO is announced.
Citigroup Global Markets India, Kotak Mahindra Capital, JP Morgan India, Morgan Stanley India, and Axis Capital are the bankers to the Meesho IPO.