Source: Meesho
Today is the last date for MEESHO IPO-SHOULD YOU APPLY? Let’s start with the background story.
What is Meesho — The Background Story
Meesho began as a technology-enabled marketplace aimed at India’s underserved, price sensitive and value conscious consumers living especially in Tier-2, Tier-3 cities and rural India.
Instead of owning inventory, Meesho followed an asset-light model. It connects small sellers (often working independently or at small scale) with buyers, and facilitates logistics via its network (called Valmo), without bearing the costs of stocking or warehousing starkly in contrast with asset heavy models followed by Amazon and Flipkart that sometimes charge even up to 30% as their commissions.
This “zero-commission” approach for sellers encourages a large number of small sellers to list products and take the plunge often unbranded, affordable, daily-use items — making Meesho a go to for value conscious buyers across India. Unbranded products offer the highest margins to sellers thus making business easy
As of 2025, Meesho claims to be India’s largest by number of placed orders and annual transacting users among E-commerce firms and growing continously year on year,
Thus, Meesho is fulfilling its founding promise of democratizing E-commerce access for smaller sellers and shoppers outside major metros and making them reach even corners of rural India.
IPO at a Glance — GMP, Price Band & Current Market Sentiment
- The IPO of Meesho is worth ₹5,421.20 crore, consisting of a fresh issue of ~38.29 crore shares (≈ ₹4,250 crore) and an offer-for-sale (OFS) worth 10.55 crore shares.
- Price band is fixed at ₹105–₹111 per share.
- As per grey market data, the Grey Market Premium (GMP) is quoting at ₹49 per share, implying a likely listing price at ₹160 per share offering roughly a 45% potential listing gain over the issue price and a profit of Rs 6682 per lot.
- Given this GMP, strong demand and popularity of the stock many analysts and market commentators view Meesho IPO as one of the most anticipated public offerings of the year.
A high GMP suggests strong investor sentiment and expectation of a robust price jump on listing;though it’s not a guarantee, more of a market sentiment indicator.
Financial Performance & Key Business Metrics
Here’s a snapshot of Meesho’s recent financials and operational metrics:
| Metric / Indicator | FY25 / H1 FY26 / Recent Data |
|---|---|
| Revenue (FY25) | ₹9,389.9 crore (23.3% YoY growth) |
| Net Merchandise Value (NMV) (FY25) | ₹29,988 crore (29% YoY growth) ) |
| Order Volume (FY23 → FY25) | Up from 102.4 crore to 183.4 crore orders |
| Active Users (Annual transacting users as of Sept 2025) | 234.2 million (from 175 million twelve months ago) |
| Active Sellers | 706,471 sellers (up from 440,824 twelve months ago) |
| Contribution Margin (unit economics) | Contribution margin rose by 200 bps over two years to 4.9% |
| Free Cash Flow (LTM as of H1FY26) | Positive — ₹581.5 crore |
| Losses (FY25 adjusted) | Adjusted loss of ₹2,595.3 crore (though there are exceptional items and one-offs) |
What these numbers imply
- Very Strong Top-line Growth: With double-digit growth in revenue and high NMV growth, Meesho is scaling rapidly. Its business model — high order volumes of low-priced goods — is generating traction especially in non-metro India.
- Improving Unit Economics & Margins: Contribution margin improving, positive free cash flow, and growing seller & user base signal that Meesho’s underlying business model is progressively scaling efficiently.
- Still Unprofitable: Just like most of the startups Meesho too is unprofitable and working on profits. Adjusted losses remain large which is a small red flag.. Some of them arise from exceptional expenses (restructuring, ESOPs, tax) needed for public listing. Most of the startups have huge ESOPs cost.
- Scale & Reach Over Premium Goods: Unlike premium-focused e-commerce platforms, Meesho plays the “value, volume and penetration” game — aiming for mass adoption(Economy of scale) across India. This gives it a different risk reward profile, less margin per order but very high potential volume not really tried by other big e commerce companies
Analysts describing Meesho’s valuation (at around 5x FY25 revenue) calling it vey ambitious but justifiable, given scale, reach and rapidly improving fundamentals.
Strengths & Risks — What Works, What to Watch Out
Strengths:
- Deep penetration across Tier-2 Tier 3 cities and rural India. Meesho’s “Bharat first approach taps a massive, underpenetrated hinterland market.
- Asset-light, capital-efficient model: no need to own inventory or warehouses, lower fixed costs compared with traditional retail / e-commerce companies.
- Scalable logistics via Valmo helps reduce fulfillment costs and raise margins as order volume increases.
- Strong network effect – many sellers, wide catalogue of low cost items, wide variety and a growing base of first-time online buyers.
Risks / Headwinds:
- Heavy reliance on cash-on-delivery (CoD) — a large portion of orders are still COD, which raises risks of likely cancellations, returns, fraud, and increases operational and reverse-logistics costs.
- Company still loss-making — near-term profitability depends on controlling costs, improving monetization (e.g. via advertising or logistics fees), and reducing cash-burn.
- Low average order value (AOV) — while this fuels high volume, low AOV means margins per order are thin; any slump in volumes could hit revenue badly.
- Intense competition — from larger, well-funded players in e-commerce and retail, who may target value-conscious customers.
What GMP & Current Market Sentiment Say
The high GMP (₹44 per share) suggests significant investor enthusiasm and expectation of a listing pop to ₹160 per share.
On the final day of subscription, the IPO was reportedly oversubscribed by 7.97 times overall — indicating very strong demand among retail, non-institutional and institutional investors alike.
GMP is not a guarantee of long-term performance. It only reflects what people are willing to pay in unofficial markets today, not future business fundamentals.
Therefore, while short-term listing gains look appealing, investors need to evaluate Meesho’s long-term potential carefully: margins, monetization strategy, competition, COD risk, and their own risk appetite.
Conclusion: Is Meesho IPO a Good Bet?
The Meesho IPO — backed by strong financial-operational metrics, a massive addressable market in India’s hinterlands, and a differentiated value-first business model — presents a compelling growth story for investors who believe in “volume + scale over premium.”
For short-term investors, the GMP suggests a likely pop, making it attractive for listing-day gains. For long-term investors, the success will depend on whether Meesho can leverage its scale to drive consistent profitability, improve unit economics, and reduce operational risks (like cash-on-delivery, returns, and competition).Fundamentals matter a lot in the long run.