Meesho IPO: Is it worth subscribing to?

Summary: Meesho, an e-commerce platform in India, is all set to go public on December 3, 2025. Despite its popularity and affordable product range, risks such as negative cash flows and competition from other players remain. We analyse if its IPO is worth your money.

Meesho, an e-commerce platform, will open its IPO (initial public offering) on December 3, 2025 and close on December 5, 2025. Of the total issue size of Rs 5,421 crore, Rs 4,250 crore comprises a fresh issue while the remaining Rs 1,171 crore will be an offer for sale (OFS).

Below is a breakdown of the company’s strengths, weaknesses, financials and past valuations to help you make an informed investing decision.

What the company does

Meesho operates a multi-sided, technology-driven marketplace that connects consumers, sellers, logistics partners and content creators. It is now India’s largest e-commerce platform by placed orders and annual transacting users. The company focuses on value, offering everyday low prices and a wide assortment of unbranded, regional and national products. Its zero-commission model and efficient, tech-led fulfilment help sellers keep costs low.

Meesho also uses AI-led personalisation to create a discovery-led, ‘window shopping’ experience. Together, these strengths have helped it attract a large and diverse consumer base.

Track record and valuation

A glance at Meesho’s financials during FY23-25 show that the company’s performance has been largely muted. Barring revenue, which grew at 28 per cent annually over the three-year period, EBIT (earnings before interest and tax) remained negative. PAT (profit after tax) too, stayed in the red throughout the three fiscals.

At the upper end of the price band (Rs 111), Meesho’s stock is expected to be valued at around 9.8 times its book value. Its P/E cannot be calculated due to negative earnings. By contrast, Meesho’s peers trade at a P/E and P/B of 93.3 times and 17.3 times, respectively.

The good

Below are some of the key advantages of Meesho.

#1 Lower costs help onboard more sellers and increase orders

Meesho’s logistics flywheel strengthens as order volumes grow, allowing logistics partners to use their capacity more efficiently and lower per-order costs. Through Valmo, partners without full end-to-end capabilities can collaborate to service e-commerce orders, increasing competition at each stage of fulfilment and driving prices down. Lower fulfilment costs reduce the charges sellers face, helping them offer sharper prices and list more low-value products. This, in turn, attracts more consumers to the platform, reinforcing the cycle of growth.

#2 Capital-efficient and asset-light model

Meesho runs an asset-light marketplace with no owned inventory or logistics, making it far more capital-efficient than traditional retail or inventory-heavy e-commerce models. This structure allows the platform to scale quickly by leveraging the existing capacity of sellers and logistics partners. As a result, its user base and placed orders have grown sharply between FY23 and FY25, with strong momentum continuing into FY26. 

At the same time, key cost ratios, such as advertising, server expenses and employee costs, have steadily declined as a share of NMV (net merchandise value) and total expenses, reflecting operating leverage and improving efficiency as the platform scales.

The bad

Below are some of the risks faced by Meesho.

#1 Lack of profitability

Meesho has remained loss-making since its launch in 2015, despite turning cash-flow positive in FY24, FY25 and the six months ended September 2024. Losses before tax, however, remain significant, and the company also reported negative operating cash flow in FY23 and the six months ended September 2025.

Though strong growth in users and placed orders has driven revenue and NMV higher, expanding at a CAGR of about 28 per cent and 25 per cent respectively between FY23 and FY25, this scale has required continued investment in technology, marketing and people, keeping the business in the red.

#2 Large number of cash on delivery orders may impact financials

A large share of Meesho’s orders still run on cash on delivery (CoD), accounting for 72 to 89 per cent of shipped orders over FY23-25 and the six months ended September 2025. This reflects the platform’s value-conscious, Tier-2+ consumer base, where trust in online payments remains limited. While CoD helps drive adoption among first-time users, it also brings operational and financial risks. High refusal rates, cash-handling requirements and dependence on small last-mile partners increase the chances of delivery failures, delayed collections and higher fulfilment costs.

#3 Stiff competition from both big and small players

Meesho operates in a highly competitive market, going up against large horizontal marketplaces, niche category players, traditional retailers and fast-growing models like social and quick commerce. Consumers and sellers have multiple alternatives, and rising expectations around speed, returns, personalisation and service quality intensify this pressure. Competitors often have deeper pockets, stronger brands and larger offline and online footprints, allowing them to cut prices, offer incentives and invest heavily in technology and logistics. As the ecosystem evolves with new formats and AI-led commerce, Meesho must keep adapting to maintain its low-cost positioning.

Where will the IPO proceeds go?

Here’s how Meesho plans to utilise the funds raised through its fresh issue of Rs 4,250 crore:

• Rs 1,390 crore will be invested in the cloud infrastructure of MTPL (Meesho Technologies Private Limited), its subsidiary
• Another Rs 1,020 crore will be invested in MTPL, for its marketing and branding initiatives
• Around Rs 480 crore will be directed towards the payment of salaries for MTPL’s machine learning and technology teams
• The remaining funds, if any, will be deployed for funding inorganic acquisitions and general corporate purposes

So, should you subscribe to the Meesho IPO?

Meesho’s IPO is likely to draw plenty of attention, given its popularity in India’s e-commerce landscape. But the company’s continuing losses and the fierce competition it faces take some shine off the story. And if your goal is long-term wealth creation, chasing every trending IPO can do more harm than good to your investments.

That’s where Value Research Stock Advisor helps. Here, we focus on helping you invest in businesses that have weathered market cycles, proven their resilience and delivered steady, compounding returns long after the IPO buzz fades.

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