The market is preparing for another big-ticket debut. Yes, e-commerce major Meesho is listing on the exchanges in a few hours from now. Meesho is India’s fastest-growing value-commerce marketplace with 21–23% market share in organised fashion retailers, leading in home & kitchen with 23–25% share, and the third largest in beauty & personal care with 8–10% share. But what premium would the country’s most inclusive digital commerce ecosystems, serving 234 million annual transacting users, list at?
The GMP for the Rs 5,421.20 crore Meesho IPO indicates scope for some surprise. Though the grey market premium is significantly below its earlier highs, it still shows scope for the issue listing at a 32% premium to the issue price of Rs 111 per share. However, readers must remember there’s nothing official about the GMP. It is just an indicative metric of investor sentiment, and the actual listing price can be very different.
Will Meesho IPO deliver a surprise or shock on listing day?
Let’s take look at what top market experts have to say about this IPO that is listing tomorrow and the long-term outlook for Meesho share price after its debut.
Meesho- Sustainable profitability key to long-term value
Sunny Agrawal – Head of Fundamental Research, SBI Securities expects the “Meesho IPO will list at a premium to the issue price. At the issue price of Rs 111, Meesho is valued at FY25 price-to-sales ratio of 5.3x on post-issue capital. Going forward, Meesho’s path to sustainable profitability will be a key monitorable especially as it continues to make investments in technology, marketing and engineers.”
Meesho – The big value and volume bet
Sneha Poddar, VP at Motilal Oswal expects the IPO to do well at the listing and pointed out that “Meesho is positioned as one of India’s most powerful long-term consumer-tech stories with a unique zero-commission & asset light model, deep Bharat penetration, a defensible logistics flywheel, and a rapidly scaling ad/content commerce engine.”
According to her, the value segment is growing very fast compared to the luxury segment. At 4.5x price/sales (Q2FY26 annualised & diluted), valuations look reasonable, it’s a comfortable valuation when you compare it with the other listed peers. Though it’s a loss-making company, it’s ultimately more of a volume kind of a game because it’s a low-end segment. So from that angle, we expect that the company can expect a good listing.”
Meesho- ‘No profit doesn’t appeal‘
However, another respected market voice, Deven Choksey, Managing Director of DRChoksey FinServ is not particularly enthused by this issue. He pointed out that it is unclear as to “what kind of moat you want to set for this company. I think it’s one more ‘me too’ company in the e-commerce marketplace, and I don’t think it has much of a moat to contribute. The second most important part is whether it is making profits; I think it’s important. Any consumer tech company without profit is a big no from our side. We are firm believers in consumer tech but I think companies which cannot make profit are not something which can ever appeal to us.
Meesho – Investment in tech and logistics to help profitability
According to Kavita Vempalli, Sr Research Analyst – Nirmal Bang Retail Research, “There has been a lot of interest in the Meesho IPO since the company has a strong foothold in the growing e-commerce business in the Tier 2/3 cities. The issue was reasonably priced at 5.7x FY25 price/sales and we believe Meesho should start making sustainable profits in the future, backed by the current investments in technology and logistics.”
Overall, Iower e-commerce penetration in India compared to the global average leaves significant headroom for growth. Also, how Meesho charts its course to profitability, optimising that opportunity, is something that the street will watch out for keenly.