Meesho Shares Soar Before Listing: IPO Subscriptions Reach 77x

Meesho’s public offering managed to attract massive interest till the very end of trading on Friday, and the market participants of all sorts poured in the demand for the issue which was already very much over and above the available number of shares.

At approximately 3:54 p.m., the BSE released its data stating the number of shares for which bids have been placed and the number of shares available for sale through the IPO. Leading the interest of QIBs, the ratio was 120.18x, non-institutional buyers were at 38.03x, and then retail investors were at 18.16x.

The issue of the e-commerce company had already Rs 5,421 crore and was already supported by SoftBank, it is getting closed today and this was the case from the beginning when it made the offering last Wednesday.

On Friday, the GMP remained at Rs 49.5. Assuming the upper price band of Rs 111 for Meesho, the trend identifies a possible listing of Rs 160.5, which is 44.59% higher. The grey market had a positive outlook that lasted throughout the nine days, with the price going up from Rs 33, which was the lowest point.

Day-by-Day Subscription Trends

Day 1 (Dec 3): 2.35x

Day 2 (Dec 4): 7.97x

Day 3 (Dec 5): 77.75x

The uptick in demand has been very gradual but nevertheless widespread across all investor classes.

IPO Structure and Utilization of Funds

The offering consists of the following:

Fresh issue: Rs 4,250 crore

Sale of shares: 10.55 crore shares worth Rs 1,171 crore

Meesho is going to use the revenue for:

Upgradation of cloud services at Meesho Technologies (Rs 1,390 crore)

Brand and advertising (Rs 1,020 crore)

AI and ML professionals’ salaries (Rs 480 crore)

Increasing market share through acquisitions and other corporate funding needs

Which Analysts Say About Applying

Rajan Shinde of Mehta Equities calculated that the valuation of Meesho at the upper band results in a market capitalization of almost Rs 50,096 crore. The revenue multiples are about 5.3 times for FY25 and 4.9 times for FY26 (annualized). Shinde expects the firm to not only keep its current market position but also enhance its profitability over time as he suggests long-term, high-risk investors to subscribe.

In FY25 India’s retail market is Rs 83 trillion and in FY30 it is projected to reach Rs 123 to 135 trillion. Meesho’s existing market is about Rs 33 trillion which is going to become Rs 51 to 56 trillion by FY30, thus becoming faster than the overall retail expansion.

Brokerage Views and Market Position

Nirmal Bang

They mentioned Meesho’s robust position in Tier-2 and Tier-3 markets with a no-commission model. The company still incurs losses, but its cash flow is positive. Loss from EBITDA was Rs 579 crore (FY25) and Rs 693 crore (H1FY26). The brokerage continues to recommend a Subscribe call citing the possibility of margin improvement.

Indsec Securities

Indsec anticipates that the ongoing infrastructure developments especially in the area of last-mile connectivity and the Valmo logistics platform will provide the necessary operational leverage. The firm also gave a Subscription recommendation.

ICICI Direct

The brokerage firm pointed out that Meesho’s model serves non-metro cities value-conscious consumers. Its consistent free cash flow along with a 5x FY25 revenue multiple positions the issue as one that is reasonably priced against its peers. ICICI Direct has a Subscribe call.

Growth Levers Highlighted by Analysts

Asset-light structure

Repeat cashflow generation

Deep penetration in non-metro regions

Self-reinforcing flywheel of sellers, users, and logistics

Greater variety of products to encourage transactions

The customer base of Meesho is primarily composed of customers from Tier-2 and Tier-3 areas and together they form a crucial segment that affects the overall direction of the company.

Meesho is in a competitive situation with major trading platforms and new D2C businesses. Price wars and poor customer service can hinder the growth of the company.

A scattered seller network can lead to problems with quality and delivery. A decrease in the number of active users, both customers and sellers, may result in a shift in demand and a decrease in the variety of products. The payment method through cash on delivery (COD) is the most common one in the company, which makes the operation more complex and also poses difficulty in cash flow management.

Trust and acceptance of the product will be affected by the returns and complaints due to the presence of low-quality or counterfeit items.

Key Shareholders in OFS

Part of the shareholders who are selling:

Elevation Capital

Peak XV Partners

Golden Summit

Y Combinator

Promoters

18.5% is the stake of the promoters while the public shareholders own 81.5%. Some of the large investors are:

Elevation Capital — 15.11%

Naspers Ventures — 12.34%

Peak XV Partners — 11.3%

SVF II Meerkat (SoftBank) — 9.3%

WestBridge Crossover — 3.92%

IPO Timeline

Finalization of allotments: Dec. 8

Initiating refunds: Dec. 9

Transferring shares: Dec. 9

Dec. 10 being the day of listing on BSE and NSE.

Reservation Structure

QIB: Minimum 75%

NII: Maximum 15%

Retail: Maximum 10%

Lead Managers and Registrar

The offer is managed by:

Kotak Mahindra Capital

JP Morgan India

Morgan Stanley India

Axis Capital

Citigroup Global Markets India

Registrar: Kfin Technologies

Peer Set

Meesho’s listed competitors are:

Eternal

Swiggy

Brainbees Solutions

Nykaa

Vishal Mega Mart

Trent

DMart