Meesho IPO Sees Muted Bidding on Day 1, But Analysts Still Bet on Its Zero-Commission Flywheel

The initial public offering (IPO) of Meesho opened for bidding today, Wednesday, December 3. The public issue saw a muted response in early trade, with overall subscription reaching just 0.46 times as of 11.50 am. Retail investors continued to drive demand as the RIIs category bid 1.73 times their allotted quota.

On the other hand, non-institutional investors (NIIs) subscribed 0.53 times. However, there was no participation from Qualified Institutional Buyers (QIBs) yet. The ecommerce platform has set the IPO price band at ₹105 and ₹111 per equity share. The offering consists of both fresh issuance and an offer for sale (OFS).

The issue will remain available for subscription until December 5, 2025. Investors are able to apply in lots, with each lot consisting of 135 company shares.The company aims to raise ₹5,421.20 crore, of which ₹4,250 crore will be raised through fresh shares. The remaining ₹1,171.20 crore will be raised via OFS.

Meesho raised ₹2,439 crore from over 60 anchor investors, including SBI MF, GIC, Fidelity, BlackRock, Axis MF, Aditya Birla MF and Dragoneer. Kotak Mahindra Capital, JP Morgan India, Morgan Stanley India, Axis Capital, and Citigroup Global Markets India will serve as lead managers.

The company reduced its losses to ₹700.7 crore for the six months ending September 2025, compared to ₹2,512.9 crore during the same period last year. Its revenue grew 29.40% to ₹5,577.5 crore, up from ₹4,311.3 crore. It reported a net loss of ₹3,942 crore for FY25, driven largely by a one-time exceptional item, including reverse-flip tax and perquisite tax associated with its transition to a public company structure.

Shares of the Bengaluru-based ecommerce company will be listed on both BSE and NSE on December 10, 2025. Analysts remain optimistic about Meesho’s listing on Dalal Street, witho brokerages highlighting the company’s zero-commission model and improving financial health.

Why Analysts Are Favouring Meesho?

Market experts expect the value-focused platform to delivery sustained revenue growth and healthier cash flows, even as net losses persist. Against this backdrop, early valuations pegged at around 5x FY25 sales are being viewed as “reasonable” to “discounted” compared to peers.

“Meesho operates on a zero-commission model and primarily generates revenue through its logistics services and advertisements. Although the company is making losses on net basis even after adjusting for exceptional items, it has started to generate positive free cashflows from the last two years,” said SBI Securities in its recent report.

The company reported tax expense of ₹2,487 crore and ₹72 crore in FY25/H1 FY26 respectively on account of business combination. As this event is complete, SBI Securities said that there would likely be no exceptional tax expense going forward which should help reduce losses.

“At the upper price band of ₹111, Meesho is valued at FY25 Price-to-Sales ratio of 5.3x on post issue capital. Going forward, Meesho’s path to sustainable profitability will be a key monitorable especially as it continues to make investments in technology, marketing and engineers,” it added, while giving “subscribe” rating to the issue.

However, Swastika Investment suggested investors to “subscribe with caution”, saying they can subscribe for both listing gain and long-term.

“At a valuation of $6 billion, it is priced at roughly 5.5 times price-to-sales on FY25 basis. This is attractive compared to Zomato. It has 'scarcity premium' as it is the only pure-play 'value e-commerce' stock in India,” the brokerage firm said.

It also noted that Meesho has successfully carved out a niche in tier 2 and 3 cities where Amazon and Flipkart struggle to penetrate deeply. The company has also turned free cash flow (FCF) positive in FY25, even though reported Net Profit is still negative due to one-off items, said Swastika Investmart.

Arihant Capital Markets has issued a ‘subscribe for long-term’ rating on Meesho, citing the company’s strong FY26 outlook driven by scaled marketplace flywheels, AI-led operational efficiencies through Meesho AI Labs, and emerging growth levers such as content commerce, Meesho Mall, and its early financial services pilots aimed at deeper tier 2 penetration.

It stated that Meesho’s rising order frequency (9.5 LTM), declining customer acquisition costs, logistics efficiencies approaching China benchmarks, and 44% H1 NMV growth point to over 30% GMV CAGR ahead, alongside accelerating free cash flow conversion toward sustained profitability.

It even cautioned that macroeconomic slowdowns and intensifying competition remain key variables to watch.