Meesho IPO subscribed 8x on Day 2, retail portion booked 9x as GMP signals strong listing; should you apply?

Meesho IPO Day 2

The initial public offering of Meesho continued to see strong investor interest on its second day of public bidding on December 4. The Rs 5,421-crore IPO of the e-commerce platform has been subscribed nearly 8 times (797 percent) its offer size on Day 2.

The maiden public issue of the SoftBank-backed company received bids for around 2.22 lakh crore shares, as against the offer size of 27.79 crore shares, according to data on NSE. Retail investors have booked their reserved portion more than 9 times (914 percent).

Non Institutional Investors (NII) have also subscribed their allotted quota over 9 times (918 percent), while Qualified Institutional Buyers (QIB) have booked the portion kept for them nearly 7 times (696 percent).

About Meesho IPO:

E-commerce platform Meesho launched its much-awaited initial public offering (IPO) to raise Rs 5,421 crore through a fresh issue of shares worth Rs 4,250 crore and an offer for sale (OFS) of 10.55 crore shares by existing shareholders.

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. 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.

The IPO will remain open for public bidding between December 3 and December 5. The allotments are likely to be finalized by December 8, and the shares are scheduled to be listed on stock exchanges BSE and NSE on December 10.

Meesho GMP:

Ahead of listing, the unlisted shares of the company were trading with 40.09 percent grey market premium (GMP) over the IPO price, according to data on Investorgain. While the GMP has slightly fallen from the 44.14 percent quoted by the site on December 2, it still indicates a strong listing for the e-commerce platform.

According to IPO Watch, the unlisted shares were trading with 41.44 percent GMP over the IPO price.

Should you apply for Meesho IPO?

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.

Ravi Singh, Chief Research Officer from Master Capital Services, however, 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".

Angel One kept a 'Subscribe for long term' rating for Meesho's IPO. "At the upper price band of Rs 111 per share, Meesho is valued at roughly Rs 50,096 cr post-issue; the company remains loss-making, so P/E is negative and not a meaningful valuation metric. On operating metrics the IPO price implies an FY25 price-to-sales of ~5.3x, underpinned by a robust GMV run-rate of $6.2 billion and improving marketplace contribution margins (3.8% of NMVinH1FY26)," the domestic brokerage said.

"While strong scale momentum supports the growth narrative, near-term profitability remains volatile, positioning the offering as suitable primarily for long-term investors with a high risk appetite," it added.

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