The e-commerce retail section is red hot now, especially for the IPO market. Another big name in the ecommerce sector, Meesho is readying its Rs 5,421 crore IPO for launch. The IPO will debut on December 3 and the price band has been set at Rs 105 -111 per share, valuing Meesho at Rs 50,096 crore.
One of the largest players in India’s fast-growing ecommerce economy, Meesho boasts over 213 million annual users. The company, with a record 2 billion orders being processed in 1 year, is now ready to test its fortune in the equity market.
Meesho IPO: Issue details
The offer comprises – Fresh issue amounting to Rs 4,250 crore and an Offer for Sale (OFS) of up to 10.55 crore shares. The price band has been finalised at Rs 105 -111 per share.
Meesho IPO: Stakeholders offloading shares via Offer For Sale
The offer for sale will see key early investors and stakeholders offloading shares that would comprise approximately 4-5% stake. These include –
- Elevation Capital V will offload upto 5.54 crore shares
- Y Combinator, one of the early backers, would offload 1.26 crore shares
- Peak XV Partners Investments are set to offload 3.05 crore shares
- Another early investor, Elevation Capital is likely to sell 5.54 crore shares
- Highway Series 1, a Series of Venture Highway SPV will be selling up to 1.57 crore shares.
In terms of the stake sale by the promoters – Co-founder Vidit Aatrey along with Sanjeev Kumar Barnwal, who is also a co-founder are together going to sell upto 0.32 crore equity shares. This amounts to less than 0.2% stake in the company.
Interestingly, Dutch investor Prosus, with a 12.34% in Meesho and SoftBank, with a 9.31% stake, are not selling any stake through the OFS.
Meesho IPO: Issue objectives
Let’s take a look at how the company proposes to use the funds raised via the fresh issue-
- Meesho plans to allocate Rs 1,390 crore for cloud infrastructure in Meesho Technologies.
- Rs 480 crore would be used for payment of salaries of existing and replacement hires for the Machine Learning and AI and technology teams.
- It has also planned Rs 1,020 crore investment for expenditure towards marketing and brand initiatives of its subsidiary, Meesho Technologies.
That apart,a certain part of the IPO proceeds would also be deployed for funding inorganic growth through acquisitions and other strategic initiatives. The amount will be deployed in tranches over three-four years between IPO and FY29.
The company will not get any share of the OFS proceeds. That would go directly to the stakeholders offloading shares via the offer for sale.
Meesho business fundamentals
A look at the business fundamentals for Meesho –
It is a multi-sided technology platform driving e-commerce. The company, in its DRHP, lists out the four key stakeholders in its business model. They include –
-Consumers
-Sellers
-Logistics partners
-Content creators
This e-commerce marketplace serves consumers from diverse income backgrounds. ‘Everyday Low Prices’ is one of the biggest hooks for attracting consumers. Meesho is able to offer significantly lower prices through “low-cost channels for sellers, which in turn allows them to offer a wide assortment of products at affordable prices to consumers,” the DRHP highlighted.
Sellers on Meesho include manufacturers, wholesalers, and traders. The company also engages with logistics partners, encompassing first and last-mile delivery businesses, sorting centres, and truck operators, to ensure cost efficient order fulfilment. Content creators on Meesho enhance product discovery and drive sales by sharing engaging content.
Meeshi also looks to monetize platforms through services that are provided to sellers such as order fulfillment, advertising and data insights.
Meesho Financial performance
The company has been clocking losses for consecutive financial years. Its restated losses for FY25 stands at Rs 3,941.70 crore. This has increased significantly from the FY24 PAT (Profit after tax) of Rs 327.64 crore. This is because of a one-time exceptional item. This was on account of –
-The tax incurred for reorganization of the company
-Additional costs due to accelerated vesting of ESOPs held by our Promoters
-Related perquisite taxes paid by the company
For the six months period ended September 30, 2025, the higher restated loss was primarily driven by increased marketing investments to enhance brand awareness and user growth, scaling of technology infrastructure to support higher engagement and content-led transactions, and certain one-time exceptional items from reorganization-related activities and a vendor settlement.
The company added that the negative operating cash flow for the six-month period ended September 30, 2025 is primarily due to one-time cash outflow towards the exceptional items, such as income tax payments linked to Promoter ESOP exercises and other strategic reorganization-related outflows
Meesho: Industry overview
Meesho is a key player in the organised e-commerce retail space. E-commerce, as a retail format, enables buying and selling of goods over the internet and has been instrumental in making a broader geographic reach possible through its digital-first approach.
As per the recent Redseer Report, India’s e-commerce market is currently sized at Rs 6 trillion in terms of gross merchandise value (GMV) and is projected to reach Rs 15–18 trillion, penetrating 12–13% of India retail market by FY30. Majority of new online shoppers are projected to come from tier 2+ cities, which are projected to account for 51–52% of India’s e-commerce market by FY30, up from 44% in FY25.
According to Redseer, value-focused e-commerce runs on discovery-led purchase journey and the provision of a wide, deep and affordable assortment of products. It monetises largely through digital advertisements, owing to low commission structures and a large base of small-scale sellers. As digital infrastructure improves and consumer behaviour evolves, e-commerce is expected to be a key driver of retail growth.
Meesho IPO: Key outstanding litigations to watch
Meesho RHP highlighted that the one its service providers, Amazon Web Services India (AWS) has initiated arbitration proceedings against the Company before a three-person arbitral tribunal in New Delhi for alleged non-payment of invoices raised by AWS pursuant to a private pricing addendum dated February 25, 2022 executed between AWS and Meesho.
As per the RHP, pursuant to a letter dated August 2, 2024, Meesho has disputed the invoices raised by AWS alleging deficiencies in the services provided by AWS. It also challenged the enforceability of the minimum commitment provisions under the PPA and the applicability of AWS’ online customer terms and conditions. The amount claimed by AWS in the matter, as stated in the statement of claim dated November 5, 2024, amounts to $14.44 million comprising spend commitment shortfall payment amount, pending service fees, interest on the respective payments and the cost of arbitration.
Meesho, in turn, has filed a statement of defence and counterclaim dated January 31, 2025, praying for dismissal of the claims made by AWS and counterclaiming Rs 86.49 crore, comprising a claim for losses suffered due to disruption of business and inadequate support provided by AWS, salary costs incurred due to migration from services procured from AWS, along with interest and costs, before the Arbitral Tribunal.
AWS has subsequently responded to Meesho’s statement of defence and counter claims by way of a reply dated March 18, 2025, filed before the Arbitral Tribunal. The Arbitral Tribunal, by way of an order dated May 3, 2025, directed AWS to place the PPA before the collector of stamps for adjudication and stamping. The matter is currently pending.
Meesho IPO: Key risks
Here is a quick look at the key risks that investors must watch out for –
1. What’s triggering the losses: The company has been incurring losses since inception in 2015. While we have been cash flow positive in FY25 and FY24, the losses have been restated. They had negative cash flows from operating activities for the three-month period ending June 30, 2025 and FY23. If it is unable to generate adequate revenue and manage cash flows and expenses, there is a possibility that the company may continue to incur losses.
2. Attracting new customers: If the company fails l to attract and retain consumers on their platform, the business, financial condition, cash flows and results of operations may be adversely impacted. The consumer base has grown between FY23-FY25 but this primarily due to a combination of investments in marketing initiatives and ongoing enhancements to the platform experience. Going forward, Meesho intends to continue to invest in both marketing and technology to support consumer growth and retention
3. Retaining sellers a challenge The other key risk highlighted in the DRHP is what if Meesho fails to retain sellers on its platform. The business, financial condition, cash flows and results of operations may be adversely affected. The ability to retain and expand the seller base is critical to maintaining and enhancing product assortment on our platform, increasing competition to reduce cost of products and driving overall platform growth. Sellers are attracted to Meesho as it offers a low-cost channel and access to a large consumer base.
4. Service interruption may impact timely delivery: Products sold on Meesho are delivered to consumers through third party logistics partners either through (i) Valmo, the technology platform or (ii) end-to-end logistics partners. Meesho also engaged with five end-to-end logistics partners as of June 30, 2025. Any interruption in these services could impact profitability.
5. Cash on delivery factor: A large portion of Meesho orders are paid via cash on delivery. In the June quarter alone, 75.09% of the orders shipped by Meesho were on CoD basis. This is a worry for the company as this mode of order directly impacts the rate of successful deliveries and raises the risk of customers refusing to pay. As a result it has a telling impact on operational efficiencies.
Further, the company highlighted that any disruption in its tech infrastructure may impact performance and hamper uninterrupted delivery. Competition is also a key factor to watch, given how crowded the internet retail space is at the moment. Going forward as the investors prepare for the IPO launch, all eyes will be on how the company tackles these challenges and maintains a sustainable business post-listing.
