Institutional demand was particularly strong with the QIB category being subscribed 120.18 times, with 18,07,17,42,600 bids for just over 15 crore shares. Non-institutional investors subscribed 38.16 times, while retail investors placed 19.08 times the number of shares offered.The allotment will be completed on Monday, December 8, after which the shares will be credited to demat accounts on Tuesday. The installation is scheduled for December 10.
GMP points to strong listing gains
Gray market sentiment remained buoyant over the weekend. On December 7, Meesho’s last GMP stood at Rs 42.5, suggesting a potential listing price of Rs 153.5 against the upper band of Rs 111, a gain of 38.29%. Earlier, on December 4, the GMP stood at Rs 45, implying an estimated list price of Rs 156, or a premium of 40.54%.
Why investors rushed
The IPO comes at a crucial time for India’s mass market e-commerce ecosystem. Meesho has built a strong presence in low-cost, unbranded product categories, aided by deep penetration outside major metros. The number of annual transaction users grew by 46% between FY23 and FY25, well above the industry average. In FY25 alone, 19.9 crore users placed orders on Meesho, of which 17.4 crore were from outside the top eight cities.
Analysts say investors are paying a premium for scale. Meesho is valued at roughly 5x FY25 revenue, high for a loss-making platform, but is seen as a bet on its dominance in India’s value e-commerce segment. Research analyst Ishan Tanna of Ashika Institutional Equity Research said: “The company is still making losses, but the market is betting on rising order volumes and improving operational efficiencies to drive future profitability. High valuations for loss-making companies can be volatile as growth slows or costs rise, but current optimism is focused on potential profits rather than current profits.”
The financial picture of Meesho
Meesho reported FY25 revenues of Rs 9,390 crore, up 23.3% year-on-year, and continued to narrow EBITDA losses. Even as the economy remained in the red with an adjusted loss for FY25 of Rs 2,595 crore, analysts point to a unit improvement in the economy.
ICICI Direct highlights Meesho’s high operating leverage and two consecutive years of positive free cash flow, with an LTM FCF of Rs 581 crore as of H1FY26.
Order volume rose to Rs 183 crore in FY25 from Rs 102 crore in FY23, helped by Meesho’s ‘everyday low prices’ strategy. Contribution margins improved by 200 basis points to 4.9% over two years. The company’s logistics backbone, Valmo, has played a role, as have increasing prepaid orders. The zero commission model has also supported a massive seller ecosystem, with 15.4 crore active product listings daily in H1FY26.
Yet risks remain. The heavy reliance on COD increases the risk of fraud and cancellation, and competition is fierce in terms of fulfillment, product discovery and affordability.
Should Investors Bite?
Real estate agents remain positive. ICICI Direct has recommended a subscription, highlighting Meesho’s growing user base, improving operational metrics and increasing economies of scale. However, the stock’s post-listing performance will depend on whether Meesho can translate its rapid growth into sustainable profitability, especially at a valuation that investors already view as a vote of confidence.
With the listing date just days away, the market is gearing up for one of this year’s most anticipated tests of investor appetite for India’s next-generation internet companies.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
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