In a move that underscores the maturing muscle of India’s e-commerce sector, Bengaluru-based Meesho has quietly submitted an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), paving the way for what could be the country’s first pure-play horizontal marketplace to hit the bourses. Sources close to the development reveal the SoftBank-backed unicorn is now gunning for a $700–800 million (₹5,800–6,600 crore) initial public offering (IPO), blending a hefty $500 million fresh issue with an offer-for-sale (OFS) tranche of $200–300 million. This ambitious raise, targeting a December 2025 listing, signals not just investor appetite for new-age disruptors but also Meesho’s pivot from bootstrapped resilience to market-tested expansion.
Founded in 2015 by IIT Delhi alumni Vidit Aatrey and Sanjeev Barnwal, Meesho started as a social commerce trailblazer, empowering resellers—mostly homemakers and small-town entrepreneurs—to peddle affordable goods via WhatsApp and Facebook. What began as a scrappy bid to democratize e-commerce has ballooned into a $3.9 billion juggernaut, outpacing rivals in daily orders while carving a niche for Tier-2 and Tier-3 consumers. With over 120 million monthly transacting users and a gross merchandise value (GMV) run rate touching $6.2 billion in FY25, Meesho’s appeal lies in its zero-commission model for sellers and hyper-local logistics, outflanking behemoths like Amazon and Flipkart in volume, if not yet in value.
This updated filing builds on a confidential DRHP lodged in July, which had locked in the $500 million primary component. The tweak? A clearer equity blueprint and the OFS window, allowing early backers like Peak XV Partners (formerly Sequoia India), Elevation Capital, and SoftBank to partially cash out up to 175.7 million shares. Founders Aatrey and Barnwal are slated to offload 1.1 million shares each, a pragmatic exit amid a valuation dip from its $5 billion peak. Merchant bankers—Kotak Mahindra Capital, Morgan Stanley, Citi, and Axis Capital—are steering the ship, with pre-IPO buzz hinting at a potential ₹850 crore placement round ahead of the red herring prospectus.
Financially, Meesho’s trajectory is a tale of calculated bets paying off, even as profitability remains elusive. Operating revenue surged 23% year-on-year to ₹9,389 crore in FY25, fueled by a 29% NMV jump to ₹29,988 crore. Net merchandise value (NMV) metrics paint a robust picture: Q1 FY26 alone clocked ₹8,200 crore, underscoring sustained momentum post-pandemic. Yet, losses persist—₹3,915 crore in FY25, ballooned by reverse-flip tax hits, though adjusted losses before tax narrowed to ₹108 crore. Q1 FY26’s net loss of ₹289 crore reflects heavy investments in AI-driven personalization and logistics, but insiders eye breakeven by FY27 as margins firm up.
The IPO proceeds are earmarked for turbocharging growth. A lion’s share—₹1,390 crore—will bolster cloud infrastructure at subsidiary Meesho Technologies, scaling servers for its recommendation engines. Another ₹480 crore targets salaries for AI, machine learning, and tech hires, fortifying the algorithms that power 70% of orders via personalized feeds. Marketing gets ₹1,020 crore to amplify brand recall in underserved markets, while the rest eyes inorganic plays like acquisitions to deepen categories from beauty to home decor. Post-listing, Meesho could hoard ₹7,500 crore ($900 million) in cash, a war chest for outpacing competitors in a market projected to hit $350 billion by 2030.
From an Indian vantage, this IPO is more than a liquidity event; it’s a litmus test for the sector’s post-Flipkart acquisition era. Meesho’s domicile shift from Delaware to India—greenlit by the NCLT in June—eases regulatory hurdles and aligns with the Atmanirbhar push. It joins a D-Street frenzy: Lenskart’s ₹8,000 crore November splash and Groww’s ₹7,000 crore tilt, collectively eyeing ₹18,000 crore-plus from startups this year. Valuation whispers hover at $4–5 billion, a prudent haircut to woo retail punters, but skeptics flag risks—fierce discounting wars, regulatory scrutiny on data privacy, and a slowing consumer wallet amid inflation.
For Aatrey, whose journey from a Flipkart alum to e-commerce evangelist mirrors India’s digital ascent, this is vindication. “Meesho isn’t just selling saris; it’s scripting economic inclusion for 10 million resellers,” one source quipped. As SEBI nods roll in, December’s bell could ring in a new chapter for horizontal e-tail, proving that in India’s bazaar of billions, the underdog’s bite is mightier than its bark
Last Updated on Wednesday, October 22, 2025 2:21 pm by Startup Chronicle Team
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