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Wednesday was a very special day for Meesho investors in the Indian stock market. The company performed well as soon as it entered the market and showed a rise of up to 60% on the very first day of listing. This increased the confidence of investors and the company’s market entry was recorded as ‘Superhit Debut’.
Got huge premium on listing
The IPO issue price of Meesho was fixed at Rs 111. But as soon as the company’s shares were listed at Rs 162.05 on NSE and Rs 161.20 on BSE, there was a stir in the market. Shortly after the listing, the share reached a day high of Rs 177.55 on BSE, that is, the investors who got shares of the company through IPO got the initial profit of about 60%. Brokerage houses had already expressed expectations of such a strong debut.
IPO got tremendous response
Investors subscribed to Meesho’s IPO wholeheartedly. The company’s issue was subscribed a total of 81.76 times, which is one of the most powerful tech IPOs in recent years. This IPO received 123.34 times subscription from QIBs, 39.85 times subscription from NII and 19.89 times subscription from retail investors.
Where will the company invest the money raised from IPO?
Meesho will use the fresh issue and OFS amount of Rs 4,250 crore raised from the IPO for several major projects like strengthening cloud infrastructure, expanding AI and machine learning teams, improving logistics capabilities, increasing marketing spend, and making new acquisitions through subsidiary MTPL. The company’s focus is on increasing scale and strengthening technology.
How is Meesho’s business model growing?
Meesho runs on an asset-light e-commerce model, connecting millions of users and small merchants together. The company’s specialty lies in providing products at low prices, providing high-frequency categories like fashion home and personal care and increasing digital reach of small sellers. In FY25, Meesho had more than 7 lakh active sellers and 234 million users.
Revenue increased, but loss still a challenge
The company’s FY25 revenue increased by 26% to Rs 9,901 crore. But due to rising operation costs and low margin products, the net loss increased to Rs 3,942 crore. A loss of Rs 701 crore was also recorded in the first six months of FY26. That means revenue and user base are increasing, but making profit remains the biggest challenge of the company.
The biggest question after listing: When to make profit?
Although the company is debt-free, analysts say that the focus of investors in the coming times will be whether Meesho will be able to improve unit economics and reduce losses on a large scale? Along with this, the question in the minds of investors is whether the company will be able to save market share in the tough competition of e-commerce? That is, the strong listing on the first day has definitely given a strong start, but the journey is still long.
