Is Meesho IPO a Solid Long-Term Play or a Wait-and-Watch Opportunity?
Meesho, often dubbed the “Aam Aadmi’s Amazon,” is gearing up for an IPO aiming to raise ₹4,250 crore through a fresh issue, primarily for cloud infrastructure investments and capital expenditures. Additionally, it plans to garner ₹1,171.2 crore via an offer for sale. A notable portion, about ₹480 crore, will be allocated to staff salaries for its technology development subsidiary. Following the IPO, the promoter group’s stake will dip from 18.5% to 16.3%.
Understanding Meesho’s Financial Landscape
In the competitive e-commerce sector, Meesho’s revenue model is promising, generating income from services such as order fulfillment and advertisements. Despite experiencing an uptick in losses for FY25 compared to FY23, there’s a glimmer of hope as losses have decreased in the recent six months leading to September 2025. Investors may be inclined to wait for more stable financials post-listing.
Founded in 2015, Meesho operates as a comprehensive e-commerce marketplace, making a variety of affordable products accessible to consumers while providing sellers a cost-effective platform to expand their businesses. Redseer Consulting ranks Meesho as India’s largest e-commerce marketplace in terms of order volume and annual transacting users, boasting an impressive 234.2 million users and 706,471 sellers as of September 2025.
The company’s innovative logistics arm, Valmo, enhances its capabilities by partnering with third-party service providers for nationwide delivery. This arm charges sellers shipping fees, creating an additional revenue stream through effective cost optimization.
Evaluating Revenue Growth and Future Prospects
Revenue saw a substantial growth rate of 28% year-on-year, reaching ₹9,389.9 crore from FY23 to FY25. Operating losses have narrowed, with the Ebitda loss decreasing from ₹1,640.5 crore in FY23 to ₹1,413.9 crore in FY25. However, Meesho’s net loss has increased significantly, surging to ₹3,941.7 crore in FY25.
Given that the company is yet to turn a profit, traditional price-to-earning metrics are not applicable, but the price-sales (P/S) multiple currently stands at six based on post-IPO equity and FY25 revenue. Comparatively, other e-commerce firms have P/S multiples ranging from two to 14, including Brainbees Solutions and Swiggy.
Should You Invest Now or Wait?
While the growth in revenue and decreasing net losses are reassuring indicators, potential investors may opt to adopt a wait-and-watch approach to gauge Meesho’s financial stability following its IPO. This cautious strategy could provide better insights into its long-term viability as a solid investment opportunity.