Meesho made a strong entry into the public markets, opening at a sharp premium and extending its gains through the day. The company stock is listed at Rs 162 per share, which is a 46% jump over its issue price of Rs 111. On the NSE, it went on to climb all the way to Rs 170.02, rising a further 5% past its listing level.
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Strong IPO response, backed by heavy institutional demand
Meesho facilitates trade between retailers and customers. As per a report by the Indian Express, a strong investor response was seen in the e-commerce marketplace during the IPO window opened on December 3-5. The issue was subscribed to over 79 times, with institutional investors driving the frenzy by taking their allotted portion over 120 times.
The company in total raised Rs 5,421.20 crore-Rs 4,250 crore through a fresh issue and Rs 1,171 crore through an offer for sale by existing shareholders.
Where will the funds be utilised?
In its DRHP, Meesho elaborated that a substantial portion of the new capital would go toward expanding Meesho Technologies' subsidiary. The intended investment involves enhancing cloud infrastructure as well as marketing and brand-building efforts to engender deeper market penetration.
The company also said that some of the proceeds would be used to pay salaries of the staff in its AI and machine learning teams, a statement which has elicited a mixed reaction, with some experts questioning what it was meant to achieve. Despite that, market sentiment largely remained favourable, supported by what brokerages saw as attractive valuations and revenue potential.
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Revenue growth and narrowing losses
As per the report by the Indian Express, the latest financials from Meesho strengthened investor confidence. The company reported FY25 revenue of around Rs 9,390 crore, up from Rs 7,615 crore in the previous year. Its losses also narrowed significantly, falling from Rs 3,942 crore to Rs 289 crore. Brokerage Choice International said, “Meesho remains in the high-growth phase of the platform lifecycle and is expected to deliver 31 per cent FY25–28 revenue CAGR.”
