Meesho’s IPO: Can massive reach translate into profits?

SoftBank-backed e-commerce firm Meesho comes to the public markets this week confident in a model that has rewritten India’s e-commerce rules—building a vast, low-price marketplace with one of the industry’s lowest average order values (AOVs), even as it continues to test that model’s limits.

- Mayur Bhalerao

Its ₹5,421 crore initial public offering, or IPO, opening Wednesday, is built around a large ₹4,250 crore fresh issue and a sharply reduced offer for sale (OFS), trimmed by nearly 40% from, from 11.8 millions shares to 16 million shares. Early investors pared back their exits, but founders Vidit Aatrey and Sanjeev Kumar have increased theirs, from ₹6.7 crore to ₹15.2 crore each a move, hinting at both liquidity needs and belief in the business they are about to list.

Beyond the numbers, the IPO proceeds mark the start of Meesho’s next phase of rebuilding and expansion. Meesho plans to deploy the fresh capital into strengthening its technology backbone, expanding cloud infrastructure, funding salaries across its artificial intelligence (AI), machine learning (ML), and technology teams, and investing in marketing through Meesho Technologies Pvt. Ltd. A portion is earmarked for acquisitions and other strategic bets.