Meesho IPO LIVE: Rs 5,421-crore IPO sees retail portion fully subscribed within first hour of opening; GMP rises

Brokerages present a broadly positive but measured stance on the Rs 5,421-crore public issue, with many recommending 'subscribe' on the Meesho IPO for long-term investors while underscoring material risks -- chiefly profitability and competition.

Meesho’s decision to allocate a disproportionately large share of its Rs 2,439-crore anchor book to SBI Mutual Fund was made by the company’s management — not its merchant bankers — according to multiple stakeholders familiar with the matter.

The call reflects a growing shift in India’s IPO market, with issuers increasingly engaging directly with prospective investors well ahead of the offer, negotiating on price and quantity and, in some cases, overruling banker recommendations. The episode has also exposed how the absence of any framework for “fairness” in anchor allocation leaves room for subjective judgments, creating a multi-sided disagreement among institutional investors over what constitutes equitable distribution in a largely opaque process.

While EBITDA is still negative, valuation naturally centres around EV/Sales. Peer platforms trade between 2 to 6.5x EV/Sales range (Brainbees at 2.1x Swiggy at 6.5x), while higher-margin players like Eternal and Nykaa command premium multiples of 14.5x and 9.7x. Meesho’s 4.8x EV/Sales sits squarely in the middle.

Founded in 2015, Meesho operates a pure marketplace model, which allows it to scale with minimal inventory risk and working capital needs. The platform hosts over 700,000 annual transacting sellers (ATS) and serves 23.4 crore annual transacting users (ATUs), primarily value-conscious consumers.

Its catalogue focuses on low-ASP (Average Selling Price) categories, including fashion, beauty, and home décor -- typically priced between Rs 250 and 350. This price segment, traditionally underserved by Flipkart and Amazon, due to unfavourable logistic economics, forms Meesho’s competitive moat.

Grey market premium of Meesho rose to 44% as the retail portion of the share sale got fully subscribed within first hour of its opening.

At 11 am, the Rs 5,421-crore Meesho IPO saw its retail portion get 97% subscribed and total subscription stood at 27%.

Delhivery shares fell for the third day on December 3 after Jefferies said the increasing reliance of soon-to-be-listed Meesho on its in-house low logistics arm Valmo acts as a key downside risk for the logistics platform.

Jefferies noted that Valmo now handles approximately 50 percent of Meesho's shipments at a lower cost, as against third party logistics providers such as Delhivery.

Within first few minutes of opening, the Meesho IPO saw its retail portion booked 45% while overall subscription stands at 13%.

Ravi Singh, Chief Research Officer from Master Capital Services, highlighted that Meesho enters its IPO with strong cash-flow discipline and steady growth, driven by deep value-market penetration and efficient operations. "Meesho's growth is different because it is still tapping into a part of India that is not fully penetrated by large e-commerce players. A big chunk of its demand comes from first-time online buyers in smaller towns who are more focused on price and selection than on brand names," he said.

Profitability is possible, but it will likely come gradually rather than through any sudden turnaround, Singh said, adding that investors should look at this IPO as a "long-term execution story, not a quick-margin business".

Meesho operates in the highly competitive Indian e-commerce sector with weaker fundamentals, said Abhinav Tiwari, Research Analyst at Bonanza. “Despite achieving 1.8 billion annual transactions and 5.3x FY25 PS valuation, Meesho reported adjusted EBITDA losses of Rs. 5,518 crore in H1 FY26. While the company achieved positive free cash flows recently, the path to sustainable profitability remains uncertain, with H1FY26 showing deteriorating contribution margins at 3.8% versus 5.6% in FY24. The company faces intense competition from established players Amazon and Flipkart while still burning capital on marketing and technology investments,” he said.

Ahead of listing, the unlisted shares of the company were trading with more than 44 percent grey market premium (GMP) over the IPO price, according to data on Investorgain.

SoftBank-backed e-commerce platform Meesho is set to launch its much-awaited initial public offering (IPO) tomorrow, December 3. The company has fixed its price band at Rs 105-111 per share, valuing the business at nearly Rs 50,096 crore at the upper end.

The Rs 5,421.05-crore IPO comprises a fresh issue of shares worth Rs 4,250 crore and an offer for sale (OFS) of shares worth up to 10.55 crore shares by existing shareholders. Investors can bid for a minimum of 135 shares, requiring an investment of Rs 14,985 at the upper price band, and in multiples thereafter.