IPO closes on 5 Dec'25
Meesho Ltd
Minimum Investment
₹ 14,985 / 135 shares
Subscribe for listing gains
- Meesho has consolidated its position as a dominant force in value-led e-commerce. Its growth engine remains strong, even as EBITDA stays negative and the company continues to operate without a clear path to profitability since its inception in 2015.
- However, this IPO is not a profitability story—it is a structural bet on the formalisation and expansion of India’s value-commerce ecosystem. India’s e-commerce market, currently around Rs 6 lakh crore, is projected to expand to Rs 15–18 lakh crore by FY30, with online retail penetration rising to 12–13%. Crucially, Tier 2+ consumers are expected to drive this expansion, contributing 51–52% of the market by FY30. This structural shift strongly aligns with Meesho’s digital-first DNA and deep penetration across non-metro markets.
- While India’s e-commerce shopper base grew by 11–20% between FY23 and FY25, Meesho’s Annual Transacting Users (ATU) grew by around 46% in the same period, indicating that a significant share of shopper expansion in the last two years has come through Meesho.
- Operationally, Meesho enjoys scale advantages, a large and diversified seller ecosystem and improving user cohorts, even though the segment remains vulnerable to high returns, CoD-heavy payments and structurally thin margins.
- Importantly, despite its losses, Meesho generated the largest free cash flow among scaled listed e-commerce companies in India in the twelve months ended September 30, 2025. Favourable working-capital dynamics—upfront customer payments and scheduled seller payouts—enable disciplined cash burn even with negative EBITDA, a rarity in Indian e-commerce.
- For long-term investors, the central question is not whether Meesho can continue scaling—it already has—but whether it can eventually convert scale into sustainable margins and cash flows without recurring capital infusions. Nevertheless, the company offers a differentiated opportunity to participate in the formalisation of India’s fast-growing, value-driven online retail market.
- Given these factors, investors with a high risk appetite may subscribe for potential listing gains, but should closely track the company’s financial progress before committing to a longer-term position.
About the company
Founded in
13 Aug'15
Managing director
Vidit Aatrey
- Meesho operates a pure marketplace model, with its platform hosting ~7.06 lakh annual transacting sellers (ATS) and serves 23.4 crore annual transacting users (ATUs), largely comprising value-seeking consumers across India.
- The company’s catalogue is centred around low-ASP (average selling price) categories such as fashion, beauty and home décor, which has historically been underserved by players like Flipkart and Amazon due to unfavourable logistics economics — a gap that Meesho has successfully capitalised on, forming a strong competitive moat.
- Meesho’s revenue is driven primarily by logistics income, earned through fulfilment fees and optimised delivery routes. Advertising has emerged as its fastest-growing revenue stream, with sellers bidding for visibility in a high-density catalogue.
STRENGTHS
- Market Leadership: Meesho is India's largest e-commerce platform by order volume and one of the most popular shopping apps in the country. In FY25, 23-24% of India's internet users transacted on Meesho, demonstrating its deep penetration, particularly in Tier-2 and Tier-3 cities.
- E-Commerce Shipment Dominance: Meesho leads the Indian e-commerce sector in shipment volume, accounting for 29-31% of total e-commerce shipments (excluding hyperlocal shipments) in FY25, the highest among e-commerce players in the country.
- Operational Efficiency: Meesho continues to outpace competitors with 5.9 times the daily order volume of other large e-commerce platforms. Additionally, its cost to enable sales for sellers—covering commissions, margins, fulfillment and platform costs (excluding ads)—is 35-61% lower than the industry average.
- Strong Category Market Share: In FY25, Meesho recorded notable GMV market shares across key categories: 21-23% in Fashion, 23-25% in Home, Kitchen and Furnishing, and 8-10% in Beauty and Personal Care, reflecting its leadership in multiple high-growth segments.
- Scalable & Efficient Logistics Model: Meesho’s logistics network, Valmo, operates entirely through third-party partnerships—without owning warehouses, fleets or dark stores. This asset-light structure results in 0.5-11% lower shipment costs compared to competitors, enabling scalability, operational efficiency and capital-light expansion, which supports growth at low average order values (AOV).
- Resilient Growth Despite Losses: While FY25 losses increased — largely driven by one-time ESOP-related exceptional items, including perquisite taxes paid by the company — Meesho continued to record a healthy ~28% revenue CAGR between FY23 and FY25, reflecting its ability to scale and expand in a competitive market.
- Positive Operating Cash Flow: A key advantage is Meesho’s ability to generate cash. In FY25, it reported Rs 539.4 crore of operating cash flow, driven by favourable working-capital dynamics — customer payments are received upfront while seller payouts follow a scheduled settlement cycle. This enables controlled cash burn even with negative EBITDA.
RISK FACTORS
- Weak Earnings: Meesho has been unprofitable since its inception in 2015, with no path to profitability yet. Additionally, some of its subsidiaries, which are focused on new business investments, have incurred losses in the past three fiscal years. Continued losses may necessitate further financial support from Meesho, which could negatively impact its consolidated cash flows, operational results and overall financial health.
- High Proportion of CoD Orders: A significant portion of the orders are paid via Cash-on-Delivery (CoD). In H1FY26 and FY25, 72% and 77% of shipped orders were on a CoD basis. This exposes Meesho to the risk of unsuccessful deliveries, as customers may refuse to accept deliveries, leading to higher logistics costs and operational inefficiencies. Additionally, it poses risks related to cash handling.
- Contingent Liabilities: As of September 30, 2025, Meesho has contingent liabilities totaling Rs 594 crore, mainly stemming from ongoing tax disputes. Should these liabilities materialize, they could adversely impact the company’s financial position.
- High Attrition Rates: Meesho reported an attrition rate of 34% in FY25, with a peak of 53% in FY23. Persistent high attrition could result in increased hiring costs and negatively affect the company’s reputation and operational efficiency.
- Intense Competitive Pressure: Meesho faces competition from deep-pocketed players like Amazon and Flipkart, who can sustain fee waivers, seller subsidies and aggressive discounting for extended periods. Such pricing strategies could erode its market share or force higher spending on fulfilment and marketing to remain competitive.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 5,421.20 crore
Fresh Issue
₹ 4,250 crore
OFS
₹ 1,171.20 crore
Price range
₹ 105 - 111
Lot size
135 shares
Issue Objective
The fresh proceeds from the net issue will be utilised towards the following purposes:
- Investment in cloud infrastructure for Meesho Technologies Pvt Ltd (MTPL), the subsidiary;
- Payment of salaries for Machine Learning, AI and tech teams at MTPL;
- Investment in MTPL for marketing and branding;
- Funding inorganic growth through acquisitions and strategic initiatives; and
- General corporate purposes.
Dates
Bidding open
3 Dec'25
Bidding close
5 Dec'25
Allotment date
8 Dec'25
Refund date
9 Dec'25
Listing
10 Dec'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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