Meesho files updated IPO papers with Sebi; eyes Rs 4,250 crore new sales as profit increase

Meesho has filed an updated draft Red Herring prospectus with capital markets regulator Sebi for an initial public offering. The Bengaluru-based e-commerce company, known for democratizing internet commerce for millions of small merchants and consumers, plans to raise Rs 4,250 crore through a fresh issue, besides an offer for sale (OFS) of up to 17.56 crore shares by existing investors and promoters.

Major shareholders including Elevation Capital, Peak XV Partners, Venture Highway, Y Combinator Continuity, Golden Summit, VH Capital and Meesho founders Vidit Aatrey and Sanjeev Kumar will participate in the OFS.

IPO proceeds

The company plans to use the proceeds to expand its cloud infrastructure, enhance its AI and machine learning capabilities, invest in marketing and branding initiatives, and pursue inorganic growth opportunities through acquisitions. Some of the money also goes to general corporate purposes.

Meesho has quickly grown into India’s largest e-commerce platform by transacting and placing orders with users annually from FY25 onwards. The company’s model connects more than 500,000 merchants to nearly 199 million annual transaction users, fulfilling 1.8 billion orders in FY25 – a scale unparalleled in Indian e-commerce.

The number of annual transaction users grew 28% year-on-year in FY25, with the metric reaching 213 million in the twelve months ending June 2025. Order frequency improved from 7.5x to 9.4x per year over the same period, demonstrating increasing customer engagement and retention.Robust growth in orders and merchandise valueThe number of orders placed rose from Rs 100 crore in FY23 to Rs 180 crore in FY25, while net merchandise value (NMV) – the total settlement value of orders delivered – rose 29% year-on-year to Rs 29,988 crore in FY25.

NMV growth accelerated 36% year-on-year in the first quarter of FY26 to reach Rs 8,679 crore, driven by stronger demand from India’s top eight cities and increasing adoption by tier two and three consumers.

Financial turnaround and profitability milestone

On the back of a strong turnaround, Meesho became India’s largest free cash flow generator among scaled e-commerce platforms in FY25. The company’s free cash flow changed from a loss of Rs 2,336 crore to a positive Rs 1,032 crore (including interest income).

Losses before tax and exceptional items fell sharply from Rs 1,672 crore in FY23 to Rs 108 crore in FY25, underscoring a path to profitability.

The company’s net loss for FY25 stood at Rs 3,942 crore, mainly due to one-time tax costs related to its restructuring into a public entity. In the first quarter of FY26, Meesho continued to invest in technology and infrastructure, recording a pre-tax loss of Rs 148 crore and a net loss of Rs 289 crore, as the scale of the platform expanded and technology costs increased.

Strategic outlook

Meesho said it remains focused on “expanding market reach, building long-term value for the ecosystem and strengthening the foundation for sustainable growth.” The company aims to improve affordability and accessibility for consumers while supporting sellers through an asset-light, capital-efficient model.

Kotak Mahindra Capital, JP Morgan India, Morgan Stanley India, Axis Capital and Citigroup Global Markets India are the lead managers on the issue.