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Innovator in Zero-Commission E-Commerce Platforms

Meesho, founded in 2015 (formerly FashNear Technologies Pvt. Ltd.) and headquartered in Bengaluru, is an Indian e-commerce platform that began as a social commerce app and has grown into a major online marketplace for affordable products, especially in Tier-2 and Tier-3 cities. Operating on a zerocommission model, it connects consumers, sellers, logistics partners, and content creators on a single platform. Meesho has also launched Valmo, its assetlight, tech-driven logistics arm designed to streamline deliveries, lower costs, and improve efficiency.

* India’s e-commerce market is valued at around Rs.6 trillion in gross merchandise value (GMV) for FY25 and is expected to grow at a 20–25% CAGR, reaching Rs.15–18 trillion by FY30.

* Meesho’s revenue expanded at a 28% CAGR between FY23 and FY25, rising to Rs.9,390cr, driven by growth in order volumes and greater adoption of value-added services by sellers.

* The Net Merchandise Value (NMV) per annual transacting seller rose at a CAGR of 16.86%, from FY23 to FY25, reaching Rs.5,83,697.39 driven by Meesho’s zero-commission model that lowered seller costs and enabled competitive pricing.

* Meesho leads in order volume due to its low cost model, but it lags behind Flipkart and Amazon in gross merchandise value due to its limited presence in high-ticket premium-branded product categories like electronics and smartphones.

* At the upper price band of Rs.111, Meesho trades at an FY25 Mcap/Sales multiple of 5.3x. The company leverages AI platforms like BharatMLStack and generative AI voice bots to process large datasets and manage thousands of customer calls daily in multiple languages. Its strong presence in Tier-2+ cities, zero-commission model, and focus on affordable products create a sustainable growth moat. Therefore, we recommend a SUBSCRIBE rating for investors with a long-term horizon.

Purpose of IPO

The IPO consists of a fresh issue of up to 38,28,82,882 equity shares worth Rs.4,250 cr and an Offer for Sale (OFS) of up to 10,55,13,839 shares worth Rs.1,171.20cr. The objectives of the issue are i) Investment in cloud infrastructure for the subsidiary, MTPL (Rs.1,390cr)(ii) Marketing and branding expenses for the subsidiary (Rs.1,020cr), (iii) Funding acquisitions and general corporate purposes, (iv) Salaries for ML, AI, and tech teams (Rs.480cr).

Key Risks

* High cash on Delivery orders increase risk of operational inefficiencies and low order fulfilment.

* Any termination or disruption in the services provided by logistics partners, could result in delays in order fulfilment.

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