Meesho Limited, India’s leading value-focused e-commerce platform, has filed for an IPO comprising a fresh issue of ₹42,500 crore and an Offer for Sale (OFS) of up to 17.57 crore equity shares. Founded in 2015 by Vidit Aatrey and Sanjeev Kumar, Meesho targets tier 2+ cities with 213 million users and focuses on affordable products with low average order values.
While the company shows strong user growth (46% over 2 years), it remains deeply loss-making with concerning financials. This comprehensive Meesho IPO review examines whether the offering presents a viable investment opportunity.
Meesho IPO Details
| Parameter | Details |
|---|---|
| Company Name | Meesho Limited |
| Issue Type | Book Built (Fresh Issue + OFS) |
| Fresh Issue Size | ₹42,500 crore |
| Offer for Sale | Up to 17.57 crore shares |
| Face Value | ₹1 per share |
| Price Band | ₹105 to ₹111 per share |
| Lot Size | 135 Shares |
| Issue Opens | Wed, Dec 3, 2025 |
| Issue Closes | Fri, Dec 5, 2025 |
| Tentative Allotment | Mon, Dec 8, 2025 |
| Initiation of Refunds | Tue, Dec 9, 2025 |
| Listing Date | Wed, Dec 10, 2025 |
| Listing On | BSE, NSE |
| Lead Managers | Kotak Mahindra Capital, J.P. Morgan India, Morgan Stanley India, Axis Capital, Citigroup Global Markets |
| Registrar | KFin Technologies Limited |
About Meesho
Business Model: Meesho operates a discovery-led e-commerce marketplace focusing on value-conscious consumers in India’s tier 2+ cities. The platform offers affordable products across apparel, home goods, beauty, and electronics.
Key Highlights:
- 213.17 million Annual Transacting Users (LTM June 2025)
- 87.7% users from outside top 8 cities
- 54% women users
- 146.29 million Daily Active Product Listings
- Average Order Value: ₹274 (FY2025)
- Cash on Delivery: 77% of orders
Revenue Streams:
- Marketplace commission (~60-70%)
- Advertising revenue (~25-35%)
- Logistics services (~5-10%)
Market Position: According to Redseer Report, India’s e-commerce market is projected to grow from ₹6 trillion (FY2025) to ₹15-18 trillion by FY2030, with tier 2+ cities accounting for 51-52% share.
Financial Performance
Consolidated Financials
| Metric (₹ Cr) | FY2023 | FY2024 | FY2025 | Q1 FY2026 |
|---|---|---|---|---|
| Revenue | 5,735 | 7,615 | 9,390 | 2,504 |
| Total Expenses | 7,570 | 8,174 | 10,009 | 2,778 |
| Operating Loss | (1,672) | (315) | (108) | (148) |
| Net Loss | (1,672) | (328) | (3,942) | (289) |
| EPS (₹) | (4.43) | (0.87) | (9.98) | (0.68) |
| Net Worth | 2,548 | 2,302 | 1,562 | 1,322 |
| RoNW (%) | (65.61%) | (14.24%) | (252.37%) | (21.89%) |
Key Observations:
- Revenue CAGR: 28% (FY23-25)
- Core operating loss improved from ₹1,672 cr to ₹108 cr
- FY2025 loss includes ₹1,346 cr exceptional items and ₹2,487 cr tax
- NAV per share declined from ₹6.76 to ₹3.11
- Q1 FY2026: Negative operating cash flow of ₹1,268 cr (concerning)
Key Performance Indicators
| Metric | FY2023 | FY2024 | FY2025 | Growth |
|---|---|---|---|---|
| Annual Transacting Users (M) | 136.4 | 155.6 | 198.8 | 46% |
| Placed Orders (M) | 1,024 | 1,342 | 1,834 | 79% |
| GMV (₹ Cr) | 34,491 | 40,038 | 50,312 | 46% |
| NMV (₹ Cr) | 19,233 | 23,241 | 29,988 | 56% |
| Contribution Margin (%) | 2.94% | 5.61% | 4.95% | Declining |
Promoters & Management
Promoters:
- Vidit Aatrey (Co-Founder & CEO): 47.25 cr shares (11.10%)
- Sanjeev Kumar (Co-Founder): 31.57 cr shares (7.41%)
- Combined Holding: 19.08% (post-conversion of preference shares)
⚠️ Both promoters selling 1.18 cr shares each in OFS – acquired at ₹0.02-0.06, now selling at ₹[●]
Key Investors:
- Elevation Capital V Limited (13.61%)
- Peak XV Partners (11.30%)
- Y Combinator (1.22%)
- SoftBank (historical investor)
Objects of the Issue
| Sr. No. | Use of Funds | Amount (₹ Cr) |
|---|---|---|
| 1 | Cloud infrastructure (MTPL subsidiary) | 1,390 |
| 2 | AI/ML team salaries (MTPL) | 480 |
| 3 | Marketing & brand (MTPL) | 1,020 |
| 4 | Acquisitions & general corporate | Balance |
🚨 Critical Concern: All proceeds directed to subsidiary MTPL, which has:
- ₹18,597 cr debt
- Negative equity of ₹18,682 cr
- This appears to be balance sheet repair, not growth funding
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E | M.Cap/Revenue | RoNW |
|---|---|---|---|---|---|
| Meesho | 9,390 | (3,942) | N.A. | [TBD] | (252%) |
| Swiggy | 15,227 | (2,080) | N.A. | 6.61x | (30.5%) |
| FirstCry | 7,660 | (2,040) | N.A. | 2.45x | (26.6%) |
| Nykaa | 7,950 | 18 | 1,112 | 9.20x | 5.2% |
| Trent | 17,135 | 745 | 106 | 9.58x | 27.9% |
| Avenue Supermarts | 59,358 | 3,087 | 101 | 4.61x | 13.6% |
Expected Valuation: 4-6x revenue = ₹37,560-56,340 cr market cap
Strengths
✅ Large User Base: 213M+ users with strong engagement (9.23x order frequency)
✅ Tier 2+ Leadership: 87.7% users from underserved markets
✅ Improving Economics: Core operating loss reduced 93% (FY23-25)
✅ Marketing Efficiency: Ad spend reduced from 4.82% to 2.15% of NMV
✅ Zero Parent Debt: Balance sheet appears clean
✅ Strong Backers: Peak XV, Elevation Capital, Y Combinator
Risks & Red Flags
🚨 Critical Concerns
❌ 10 Years, No Profit: Loss-making since 2015 inception
❌ Hidden Debt: ₹18,991 cr borrowings at subsidiary level (MTPL ₹18,597 cr + MGPL ₹333 cr)
❌ Catastrophic RoNW: -252% destroyed 2.5x net worth in FY2025
❌ Declining NAV: ₹6.76 → ₹3.11 (54% drop in 2 years)
❌ Promoters Selling: Both founders offloading shares at IPO
❌ Negative Cash Flow: Q1 FY2026 operating cash flow: -₹1,268 cr
❌ Tax Disputes: ₹572 cr income tax contingent liability
❌ Subsidiary Insolvency: MTPL has negative equity of ₹18,682 cr despite ₹9,175 cr capital
⚠️ Operational Risks
- CoD Dependency: 77% orders with 22% failure rate
- Declining Unit Economics: AOV down 20%, contribution margin falling
- Competition: Amazon, Flipkart, Shopsy, quick commerce players
- Low Monetization: 18.7% take rate vs 25%+ for competitors
- Employee Attrition: 34% annually
Valuation Analysis
Expected Pricing
Revenue (FY2025): ₹9,390 crore
Expected Multiple: 4-6x (between FirstCry 2.45x and Swiggy 6.61x)
Implied Market Cap: ₹37,560-56,340 crore
Adjustments for Hidden Debt
True Enterprise Value calculation:
EV = Market Cap + Net Debt
Net Debt = ₹18,991 cr (subsidiary debt) - ₹4,025 cr (cash) = ₹14,966 cr
Critical: Investors paying for equity must account for ₹14,966 cr net debt burden.
Valuation Verdict
Fair Value Range: 3.5-5x revenue = ₹32,865-46,950 cr
Expected IPO Pricing: Likely 4.5-5.5x = ₹42,255-51,645 cr
Assessment: Likely overpriced given loss-making status and hidden leverage
Grey Market Premium (GMP) & Subscription
GMP Status: ₹33 per share
Anticipated Subscription:
- QIB: 2-5x (institutional caution on profitability)
- NII: 1.5-3x (HNI selective)
- Retail: 3-8x (brand appeal but educated retail cautious)
- Overall: 2.5-5x (moderate)
Sentiment Factors:
- ✅ Large user base, tier 2+ story
- ✅ Marquee investors
- ❌ Persistent losses, hidden debt
- ❌ Promoters selling
- ❌ Recent e-commerce IPO performance (Swiggy, FirstCry)
Expert Investment Rating
Overall Rating: ⭐⭐ out of ⭐⭐⭐⭐⭐
Category: HIGH-RISK SPECULATIVE
Recommendation by Investor Type
| Investor Profile | Rating | Action |
|---|---|---|
| Conservative | ❌ AVOID | Wait for profitability |
| Moderate | ⚠️ AVOID | Risk-reward unfavorable |
| Aggressive | 🟡 RISKY BUY | Max 1% portfolio if <4x revenue |
| Traders | ⚠️ CAUTION | Listing gains uncertain |
| Long-term (5+ years) | 🟡 WAIT | Accumulate post-listing at 25-30% discount |
Final Verdict
AVOID FOR MOST INVESTORS
Reasoning:
- No profitability in 10 years despite 213M users
- ₹18,991 cr hidden debt at subsidiary level
- ₹28,647 cr accumulated losses across group
- IPO proceeds funding loss-making subsidiary with ₹18,597 cr existing debt
- Promoters exiting at massive profit (cost: ₹0.02-0.06)
- Valuation risk: 4-6x revenue expensive for unprofitable business
Investment Strategy
For Risk-Tolerant Investors ONLY:
- Skip IPO – pricing likely inflated
- Watch post-listing for 2-3 quarters
- Consider entry if:
- Stock corrects 25-30% from listing
- 2 quarters of positive operating cash flow
- Clear path to profitability demonstrated
- Valuation drops to 2.5-3.5x revenue
Position Size: Maximum 0.5-1% of portfolio
Key Investment Checklist
Before investing, ensure:
✓ Can afford to lose entire investment
✓ 5+ year investment horizon
✓ Comfortable with 40-50% volatility
✓ Position <1% of total portfolio
✓ Understand subsidiary debt risk (₹18,991 cr)
✓ Accept no profitability timeline given
Proceed ONLY if all answers are “Yes”
Frequently Asked Questions
When will Meesho IPO open?
Dec 3 – Dec 5, 2025. Price band ₹105 to ₹111 per share.
Is Meesho profitable?
No. Meesho has been loss-making since 2015. FY2025 net loss: ₹3,942 crore. Core operating loss improving but still ₹108 crore. No profitability timeline provided.
What is Meesho IPO price band?
₹105 to ₹111 per share
Should I apply for listing gains?
High Risk. Recent loss-making e-commerce IPOs (Swiggy, FirstCry) showed mixed/subdued listing performance. Apply only if:
1. Comfortable holding long-term
2. Priced conservatively (<4x revenue)
3. Strong subscription (>5x)
What are the main risks?
1. 10 years without profitability
2. ₹18,991 cr hidden subsidiary debt
3. RoNW: -252%
4. Promoters selling at IPO
5. Declining NAV (₹6.76 → ₹3.11)
6. Q1 FY2026 negative cash flow
7. ₹572 cr income tax disputes
How will IPO funds be used?
All ₹4,250 cr to subsidiary MTPL for:
1. Cloud infrastructure: ₹1,390 cr
2. AI/ML salaries: ₹480 cr
3. Marketing: ₹1,020 cr
4. General corporate: Balance
Concern: MTPL has ₹18,597 cr existing debt and negative equity.
What is minimum investment?
Will be determined after lot size announcement. Typically:
Retail minimum: 1 lot = 135 Shares = ₹14,985
Amount: Lot size × Issue price
Example: If 40 shares @ ₹400 = ₹16,000
Can Meesho become profitable?
Uncertain. Requires:
8-10% order volume growth (achievable)
Maintaining 4.95% contribution margin (challenging – currently declining)
Fixed cost control (execution risk)
Earliest profitability: FY2027-28 (if successful)
What is the expected GMP of Meesho IPO?
Meesho IPO GMP is ₹33 per share.
Disclaimer
This is not investment advice. Meesho IPO involves high risk and may not be suitable for all investors. Conduct your own research or consult a SEBI-registered financial advisor before investing. Investments in equity markets are subject to market risks. Read all offer documents carefully before investing.
Past performance of promoters, investors, or similar companies is not indicative of future returns.
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