Value-focused e-commerce platform Meesho is preparing for one of the most anticipated public listings in India’s startup ecosystem. The company plans to raise ₹4,250 crore through a fresh issue, with additional shares offered by early investors in an Offer for Sale (OFS) that could see several major venture capital funds exit with impressive returns.

The Scale of the IPO

Meesho’s IPO marks a major milestone for Indian e-commerce. The company has appointed Kotak, J.P. Morgan, Morgan Stanley, Axis Capital, and Citi as book-running lead managers. It has also left room for a ₹850 crore pre-IPO placement, which could proportionally reduce the public issue size if executed.

The Bengaluru-based company, which recently moved its holding structure to India, aims to strengthen its domestic market presence while accelerating profitability.

Who’s Selling and Who’s Cashing In

Several top early investors are set for huge exits. Elevation Capital will sell around 5.5 crore shares, while Peak XV Partners (formerly Sequoia Capital India) plans to offload about 3 crore shares. Venture Highway, Y Combinator Continuity, and Golden Summit Limited are also part of the selling group.

Founders Vidit Aatrey and Sanjeev Kumar will each sell 1.18 crore shares — their first-ever secondary sale. Y Combinator’s early investment at ₹1.02 per share has turned into one of its most profitable bets in India, with returns nearly 90 times higher than later investors like Golden Summit. Elevation Capital and Peak XV are also expected to book multi-fold gains.

What Meesho Plans to Do With the Funds

The company intends to channel the fresh proceeds into technology, AI-driven infrastructure, and marketing expansion. About ₹1,390 crore will go toward cloud and data systems, ₹480 crore for engineering hires, and ₹1,020 crore for marketing and branding. Up to 35 percent of the raised amount will fund acquisitions and other corporate initiatives.

Financial Performance and Growth

Meesho’s financials reveal a company scaling rapidly but still working toward consistent profitability. In FY25, it posted ₹9,389 crore in revenue, up 23 percent from the previous year. The company recorded a net loss of ₹3,941 crore, primarily due to heavy tech investments, employee stock expenses, and one-time restructuring costs.

However, Meesho’s contribution margin saw a sharp rise, improving from ₹5,658 crore in FY23 to ₹14,836 crore in FY25. Order volumes grew at a 33 percent CAGR, while fulfilment costs fell from ₹50 to ₹43 per order, reflecting better operational efficiency through its in-house logistics arm, Valmo. The company also turned cash-flow positive, maintaining ₹5,700 crore in reserves with no debt.

Challenges on the Road Ahead

Despite strong growth, Meesho’s business model faces structural challenges. Over 75 percent of orders are cash-on-delivery, a risky model due to lower success rates and potential fraud. In FY25, the company filed a police complaint against 35 delivery partners for mishandling collected cash.

Meesho is also involved in ongoing tax and legal disputes worth over ₹7,100 crore, including a ₹5,700 crore income tax claim. Logistics disruptions, return rates of 7.6 percent, and heavy competition from Amazon, Flipkart, and quick-commerce entrants pose additional hurdles to profitability.

Leadership and Compensation

Founders Vidit Aatrey and Sanjeev Kumar earned annual salaries of around ₹5 crore each in FY25, with additional variable pay. Independent directors such as Rohit Bhagat, Surojit Chatterjee, and Hari Shanker Bhartia were collectively paid ₹4.7 crore during the year.

The Bigger Picture

Meesho’s IPO could define the next phase of India’s digital commerce boom. By catering to small-town sellers and budget-conscious buyers, it has created a powerful niche in value-driven e-commerce — one that mirrors the success of China’s Pinduoduo model.

As it heads to Dalal Street, Meesho will not only test investor confidence in India’s tech IPO market but also set the tone for how new-age startups balance growth with profitability.

 

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