Meesho's Rs 5,421.20-Crore IPO Opens — 10 Key Things To Know Before You Bid: Anand Rathi Report

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Anand Rathi Report

Here are the 10 things to know before investing

1. Meesho Ltd. launched its initial public offering today, December 3 and the offer will close for subscription on Dec. 5.

2. An e-commerce platform has fixed the price band in the range of Rs 105 to Rs 111 per equity share.

3. Meesho is a mainboard IPO that will raise Rs 5,421.20-crore. The IPO comprises of fresh issues of shares worth Rs 4,250-crore and an offer for sale worth Rs 1,171.20-crore.

4. Investors can place bids starting from a minimum of 135 shares and in multiples thereafter.

5. Meesho's shares will be listed on both the National Stock Exchange and the BSE.

6. Kotak Mahindra Capital Company Ltd., J.P. Morgan India Private Ltd., Morgan Stanley India Company Private Ltd., Axis Capital Ltd., Citigroup Global Markets India Private Ltd. are the book running lead managers for the public issue while KFin Technologies Pvt. Ltd. is the registrar to the offer.

7. Objects of the Issue:

• Investment in cloud infrastructure, marketing and branding expenses for the subsidiary.

• Funding acquisitions and general corporate purposes.

• Salaries for machine learning, AI, and tech teams.

8. Strengths:

• Platform is built on multiple scaled self-reinforcing flywheels.

• Technology-first approach with focus on AI-driven solutions.

• Delivering ‘everyday low prices’ for consumers.

• Trusted layer among the stakeholders.

• Ability to scale in a capital-efficient manner.

• Organisation built on a culture of agility and innovation, with an experienced management team.

9. Key Strategies:

• Increase consumer base and their transaction frequency by expanding the product listings and seller base.

• Further invest in technology and product development and enhance the AI capabilities.

• Deepen the ability to make e-commerce affordable and accessible.

• Increase the cash flow generation by enhancing platform monetization.

• Drive innovation through Horizon 2 Initiatives.

• Declining logistics costs is enabling e-commerce to provide low ticket servicing.

• Value focused e-commerce is well-suited to address India’s fragmented supply and affordability led demand, and is gaining share in the India ecommerce market, with stronger margin expansion.

10. Key Risk:

• A large portion of orders on Meesho are paid using cash on delivery (“CoD”). In the 6-month period ended September 30, 2025, and September 30, 2024, and Fiscals 2025, 2024 and 2023, 72.00%, 78.51%, 76.95%, 85.39%, and 88.71%, respectively, of Shipped Orders were on a CoD basis. CoD reduces the rate of successful deliveries and increases operational inefficiencies and cash-handling risks.

• Risks related to end-to-end logistics partners: The Company also relies on a limited number of end-to-end logistics partners. Any termination or disruption in the services provided by logistics partners, including operational issues, labour shortages, pricing actions, capacity constraints, or changes to the terms of engagement, could result in delays in order fulfilment.

• Any disruption to the technology infrastructure or system availability could impair the company’s ability to ensure consistent platform performance and deliver uninterrupted services. For instance, in November 2024, consumers were unable to place orders on the platform for a few hours due to technological issues. In April 2025, a system change temporarily blocked CoD payments for a subset of users, resulting in failed orders.

• The company has contingent liabilities as per Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets, and its financial condition and cash flow could be adversely affected if any of these contingent liabilities materialize.

Valuation:

Meesho runs an asset-light e-commerce platform focused on affordable, low-priced categories like fashion, home and kitchen, beauty, and lifestyle. It is a multi-sided technology platform that drives ecommerce in India by bringing together 4 key stakeholders – consumers, sellers, logistics partners and content creators.

The company’s proposition is built on affordability and unbranded assortment targeted at Tier 2+ India, supported by a discovery-led app experience. It is among India’s most-downloaded shopping apps and accounts for nearly 30% of e-commerce shipments in the country.

On the valuation front, Based on FY25 earnings, the company is seeking a, the Mcap to Sales ratio is 5.5 times and a post-issue market capitalization of approximately Rs 5,00,958 million, making the issue appears to be richly priced. We believe the company remains in an investment phase, posting a restated loss of Rs 39,417 million in FY25; however, adjusted Ebitda improved and free cash flow turned positive, signalling strengthening operating discipline.

With the value e-commerce sector continuing to grow, Meesho’s path to profitability hinges on sustained cost optimisation and marketing efficiency.

While competitive and regulatory pressures persist, the company’s scale gains and operational focus position it well for gradual margin improvement. Hence, we assign Subscribe for long term only rating for the issue.

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