E-commerce platform Meesho has filed its updated draft red herring prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI) and also received regulatory approvals to launch its initial public offering (IPO), becoming the latest new-age company that is looking to tap the public markets to raise fresh funds.
How much money is Meesho raising via its IPO?
The company is looking to raise around $480 million (Rs 4,250 crore) via a fresh issue of shares and there will be another $250-300 million (Rs 2,200-2,600 crore) in the offer for sale (OFS) component, taking its total IPO size to around $700-800 million (Rs 6,500-7,000 crore).
It will use the funds for tech costs, brand building and general corporate needs.
What valuation will Meesho command in its IPO?
The book building process will take 30-45 more days, after which the company will launch its IPO and determine its valuation. However, companies typically dilute 10 percent during their IPO which translates to a $7-8 billion valuation.
That is slightly lower than the $10 billion valuation Meesho was initially eyeing, likely to leave some money on the table for incoming retail investors.
Who is selling in Meesho’s IPO?
As part of the OFS, Meesho’s early backers like Peak XV Partners, Elevation Capital, Venture Highway (now part of General Catalyst), Y Combinator and others will sell Meesho shares.
Promoters, Vidit Aatrey and Sanjeev Barnwal, will also sell shares as part of the OFS.
Aatrey and Barnwal are also among the new class of founders who are opting to be tagged as promoters, joining a growing list of executives.
Has Meesho turned a profit?
Meesho is yet to turn a profit, the latest financial report card showed. The company had recorded revenues of Rs 7,615 crore in FY24 and a loss of Rs 305 crore.
Its losses widened in FY25, due to expenses related to flipping its base from Delaware in the US to India. The net loss for FY25 stood at Rs 3,941 crore, up from Rs 305 crore.
Without the exceptional item, meaning its losses before tax and exceptional items, stood at Rs 108 crore in FY25. In Q1FY26, Meesho’s net loss was Rs 289 crore.
The company continues to prioritise growth over profits and will continue to stay on this path over the coming quarters.
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