4 days ago
SoftBank-backed Meesho, the homegrown e-commerce platform, is gearing up to go public later in the year and plans to raise around $1 billion through an initial public offering (IPO), people aware of the developments told Moneycontrol.
“...talks are progressing and Meesho has already picked Morgan Stanley, Kotak Mahindra Capital and Citi as advisers for its IPO,” one of the sources cited above said.
If Meesho lists on the bourses this year, it would have outpaced arch rival Walmart-owned Flipkart, an old and dominant player in the space. Flipkart, started in 2007, is preparing for a market debut, too, and waiting for its parent, the US retail giant, to decide on a timeline for its IPO.
Meanwhile, Meesho is aiming to raise $1 billion and bankers have pitched a valuation of $10 billion, a second source said. “It is likely that even JP Morgan will be added to the IPO syndicate if talks materialise,” the source added.
Meesho is aiming to file its draft documents over the coming weeks, sources said. “Expect Meesho to list on the stock exchanges around Diwali this year, which is during the September-October period,” a third source told Moneycontrol.
Meesho, Citi, Morgan Stanley, JP Morgan and Kotak Mahindra Capital did not reply to Moneycontrol’s queries.
Meesho needs to first flip its headquarters from Delaware in the US to India before it goes ahead with the IPO plan. The process is in advanced stages and Meesho will likely pay around $300 million in taxes that arise from the reverse merger, as Moneycontrol reported in April last year.
The valuation game
If Meesho goes ahead and lists at a price tag of $10 billion, the e-commerce company would have seen its valuation jump 2.5X from $3.9 billion in 2024.
Meesho will then join a list of growing Indian startups such as PhysicsWallah (PW), Ather and Lenskart seeking a valuation that is significantly higher than what they commanded during their private market fundraises, as companies chart out ambitious growth plans that will reward incoming shareholders.
In the past, some new-age firms such as Ola Electric, MobiKwik and Firstcry went public at a valuation lower than what they had initially decided or at a discount when compared to their last private market fundraise to leave some value on the table for incoming investors, both retail and institutional.
Meesho, despite being a late e-commerce entrant in 2015, has grown in size and scale and improved its profit profile despite competing against well-funded rivals such as Walmart’s Flipkart and Amazon.
While Flipkart is the market leader in the Indian e-commerce space, Meesho has gained prominence over the years and grown its market share massively by focusing on Tier 3 and beyond regions or the value conscious users.
In FY22, the company had revenues of ₹3,240 crore, increased to ₹5,735 crore in FY23 and further grew to ₹7,615 crore in FY24 the company. Net loss shrunk from ₹3,248 crore in FY22 to ₹305 crore in FY24.
