commerce platform makes strong debut with 46% premium; check price, outlook & more

E-commerce platform Meesho debuted on Dalal Street after a Rs 5,421.20 crore IPO, which saw an overall subscription of 79 times. The company reported strong revenue growth and narrowing EBITDA losses in FY25, with significant user expansion outside major cities. Despite positive operational metrics, risks related to cash-on-delivery and competition persist.
Meesho made a strong debut at the Dalal Street on Wednesday, trading at Rs 161, at a premium of 46% over the IPO price. This came after the e-commerce platform's Rs 5,421.20 crore initial public offering that ended with an overall subscription of 79 times. The response has placed the e-commerce company among the most keenly followed tech listings this year. Meesho was trading at Rs 162 on the NSE, up Rs 51 from the issue price. On the Bombay Stock Exchange, the share was trading at Rs 161, up 45% from the issue price.
Meesho IPO
The IPO, which opened on December 3 and closed on December 5, offered 27.79 crore shares through a combination of a fresh issue of about 38.29 crore shares worth Rs 4,250 crore and an offer for sale of 10.55 crore shares. By the end of the bidding period, exchanges had received applications for 2,197 crore shares, a scale of demand driven largely by institutional participation, ET reported. The QIB category recorded the highest interest, with 18,07,17,42,600 bids for just over 15 crore shares, pushing its subscription to 120.18 times. Non-institutional investors subscribed 38.16 times, while retail demand reached 19.08 times. Share allotment will be completed on Monday, 8 December, followed by the credit of shares to demat accounts on Tuesday. Grey-market quotes over the weekend showed optimism. On December 7, the premium stood at Rs 42.5, pointing to a potential listing around Rs 153.5 compared with the Rs 111 upper price band, a gain of 38.29%. Earlier in the week, on 4 December, the premium was Rs 45, which implied a listing estimate of Rs 156, or a premium of 40.54%. Annual transacting users rose 46% between FY23 and FY25, with 19.9 crore users placing orders in FY25. Of these, 17.4 crore came from outside the top eight cities.
Outlook
Prasenjit Paul, Equity Research Analyst at Paul Asset and Fund Manager of the 129 Wealth Fund, told ET that tier-2 and tier-3 cities have a solid growth potential for the platform as demand continues to rise. However, he further noted that profitability in these markets is still fairly new, and both its sustainability and the relatively higher valuations need careful monitoring. InCred also assigned a Subscribe rating for short-term gains, citing attractive valuations at 5.3x market cap-to-sales. However, it warns that achieving sustained EBITDA breakeven is still some way off, given ongoing challenges in supply-chain optimisation, scaling monetisation and maintaining aggressive pricing.
Financial scoreboard
Meesho reported FY25 revenue of Rs 9,390 crore, a 23.3% increase from the previous year, while continuing to narrow EBITDA losses. The company posted an adjusted loss of Rs 2,595 crore for FY25. Analysts point to improving indicators, with ICICI Direct noting that Meesho has shown strong operating leverage and delivered positive free cash flow for two consecutive years, with LTM FCF at Rs 581 crore as of H1FY26, according to ET. Operational metrics show rapid expansion. Order volumes climbed from 102 crore in FY23 to 183 crore in FY25, supported by the platform’s “everyday low price” strategy. Contribution margins increased by 200 basis points to 4.9% over two years. The company’s logistics arm, Valmo, combined with a rising share of prepaid orders and a zero-commission seller model, enabled it to host 15.4 crore daily active product listings in H1FY26. Risks, however, remain, including dependence on cash-on-delivery orders, which heightens fraud and cancellation issues, and competitive pressure across fulfilment, discovery and affordability.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
End of Article