Meesho IPO Launches with Strong Demand and Investor Interest

Meesho, an emerging leader in India's e-commerce sector, launched its initial public offering (IPO) today, attracting substantial interest from investors. With a grey-market premium estimated at around 45%, the company set its price band between Rs 105 and Rs 111. This positioning reflects Meesho’s strategy as a high-volume, low-cost marketplace that has rapidly expanded its reach in India’s Tier-2 and Tier-3 cities.

The IPO saw robust demand, particularly in the retail segment, which was fully subscribed within just one hour of opening. This comes amid a notable shift in India's mass market e-commerce landscape towards more affordable purchases, unbranded products, and regional sellers—areas where Meesho has firmly established itself as a key player.

Recent data indicates that the annual transacting user base on Meesho surged by 46% between financial years 2023 and 2025, significantly outpacing the overall growth in e-commerce shoppers in India, which ranged from 11% to 20% during the same period. In the financial year 2025 alone, the platform reported 199 million annual transacting users, with an impressive 174 million of these customers sourced from regions outside the eight largest metropolitan areas.

Valuation Insights

Analysts have noted that Meesho's valuation, approximately five times its FY25 revenue, may appear ambitious but aligns with the trends observed in India's value e-commerce market. Investors seem willing to pay a premium for a platform that has demonstrated rapid growth in smaller cities while building a significant customer base. Although Meesho continues to operate at a loss, the market speculation leans towards its potential to convert increasing order volumes and enhanced operational efficiencies into profitability in the future.

Ishan Tanna, a Research Analyst at Ashika Institutional Equity Research, commented, “The optimism surrounding Meesho is focused on its future potential rather than current profits.”

The brokerage ICICI Direct has highlighted that Meesho's penetration into smaller cities, combined with its efficient cost structure and improving contribution margins, has enabled disciplined expansion. The company recorded positive free cash flow for two consecutive years, amounting to Rs 581.5 crore as of the first half of FY2026.

Despite a significant increase in order volumes—from 1.024 billion orders in FY23 to 1.834 billion in FY25—Meesho has strategically lowered average order values to reinforce its commitment to everyday low prices. A crucial element of this operational strategy is Meesho's proprietary logistics system, Valmo, which coordinates various last-mile delivery partners and has effectively reduced fulfilment costs while supporting scalability. Contribution margins have improved by 200 basis points over the past two years, reaching 4.9%, aided by an increase in prepaid orders and efficiencies driven by Valmo.

Financial Performance

Financially, Meesho reported revenues of Rs 93.9 billion for FY25, marking a year-on-year growth of 23.3%. Although the company continues to experience EBITDA losses, these have significantly narrowed over the last two years. For FY25, Meesho reported an adjusted loss of Rs 25.95 billion. ICICI Direct pointed out that despite ongoing losses, the platform's high operational leverage and improved unit economics offer a reassuring outlook for the long term.

Strengths and Challenges

Meesho’s unique zero-commission model has attracted a diverse array of sellers, allowing for a vast catalogue of low-cost unbranded and regional products. The company showcased 1.54 billion daily active product listings in the first half of FY26, reflecting its extensive marketplace depth.

However, the reliance on cash-on-delivery as a payment method presents inherent risks, including cancellations, fraud, and increased operational costs. Additionally, Meesho faces stiff competition from established players with deeper financial resources, which can impact its market share and operational expenditures.

Despite these challenges, analysts assert that Meesho remains a strong contender in India’s rapidly growing e-commerce sector, benefiting from a capital-efficient model that has already produced meaningful free cash flow—an uncommon characteristic among large consumer internet companies.

Should Investors Subscribe?

ICICI Direct has recommended subscribing to the IPO, citing Meesho's improving operational metrics, rapidly expanding user base, and compelling relative valuation. Similarly, SBI Securities has issued a subscribe recommendation, noting that Meesho's path to sustainable profitability will be a key area to monitor as the company continues to invest in technology, marketing, and engineering talent.

With strong retail demand, a healthy grey-market premium, and positive commentary from brokerages, Meesho’s market debut is expected to be one of the year's most closely observed listings. This is particularly significant as investors look for indicators of how India’s mass market digital consumption story is evolving in the public markets.