Meesho Takes a Measured Route to Market With a Practical, Realistic IPO Valuation

Meesho IPO Takes a Sensible Turn with Conservative Pricing and Stronger Unit Economics

In a space where new-age tech companies often debut with aggressive valuations and steep expectations, the Meesho IPO has taken an unexpectedly sensible and measured route. The social-commerce platform—one of India’s few pure-play models in this category—has priced its public issue in a band of ₹105–111 per share, valuing the company at ₹50,096 crore at the upper end. With the IPO set to raise ₹5,421 crore, analysts describe the structure as balanced, conservative, and aligned with the company’s improving fundamentals.

The most notable departure from the typical new-age playbook is Meesho’s decision to significantly trim its Offer for Sale (OFS). The OFS size has been cut by nearly 40% from earlier estimates, sending a strong signal that existing investors prefer to stay invested rather than exit at listing. For many market watchers, this adds credibility to the perception that the Meesho IPO pricing is both restrained and realistic.

Meesho Opts for Reasonable Valuation Ahead of Listing

Meesho’s last primary fundraise in 2021 valued the company at $4.9 billion. The current IPO pricing implies a valuation of around $5.8 billion, representing a modest 19% premium. That gap is far narrower than the steep valuation jumps seen during the last wave of new-age tech listings.

Analysts view the pricing strategy favourably.
“They haven’t positioned the valuation too aggressively,” said Nirav Karkera, Head of Research at Fisdom. “The Meesho IPO seems sensibly priced and sits at a level investors are likely to accept.”

This measured approach stands out in a market where several tech IPOs previously faced concerns around inflated valuations. Meesho appears keen on avoiding that risk by letting its fundamentals shape investor expectations.

Also Read : What the HUL–Kwality Wall’s Demerger Means for Investors as the Split Takes Effect on December 5

Few True Comparables for a Social-Commerce Platform of This Scale

The Meesho IPO presents analysts with a unique challenge: the company has almost no direct listed peers. Unlike platforms such as Zomato or Nykaa, Meesho operates on a low-AOV, asset-light fulfilment model backed by Net Merchandise Value (NMV) metrics rather than purely revenue-based reporting.

With a GMV of ₹701.6 billion over the last twelve months and FY25 revenue from operations at ₹5,735 crore, the numbers reflect the business’s platform-driven economics rather than traditional retail revenue. Comparisons with listed peers are therefore limited to sentiment, not valuation frameworks.

Meesho’s expanding seller ecosystem—now 706,471 strong—reflects its scale, but analysts note a decline in average orders per seller.
“More sellers are targeting the same customer base, which dilutes overall order volumes,” said Sunny Agrawal, Head of Fundamental Research at SBI Securities. “This raises risks of churn and potential quality concerns.”

Unit Economics Improve as Meesho Turns Cash-Flow Positive

A major highlight strengthening confidence in the Meesho IPO is the company’s improving operational efficiency. Contribution margins improved from 2.9% in FY23 to 4.95% in FY25, and customer acquisition costs have steadily declined.

Importantly, Meesho generated positive free cash flow of ₹351 crore in FY25, following ₹304 crore in FY24—an encouraging trend for a tech-led consumer platform seeking scale.

The adjusted EBITDA margin stands at –0.39%, but this figure masks significant one-time charges, including ESOP-related expenses and restructuring costs. Losses widened to ₹460 crore in FY25; however, that includes a large one-time tax charge of ₹743 crore. Excluding that adjustment, Meesho would have reported an operational profit of around ₹283 crore.

Analysts view this as evidence of strong improvement in Meesho unit economics, placing the business on a clearer trajectory toward sustainable profitability.

Analysts Examine What’s Behind the Losses

Some level of operating loss is expected for a platform at Meesho’s scale, analysts argue. Karkera said that overspending is not necessarily a red flag if it contributes to long-term customer value.

“If losses come from aggressive customer acquisition and the customers are remunerative, your IRR improves,” he noted. Rising contribution margins and positive cash flows support this thesis.

However, not all concerns are off the table. A note from Axis Capital highlights risks such as heavy dependence on cash-on-delivery, reliance on a limited set of logistics partners, and platform outages recorded in late 2024 and early 2025. Contingent liabilities under Ind AS 37 also remain a consideration.

Valuation Metrics Show Moderation, but Risks Remain

At the upper price band, analysts estimate:

• Price-to-NMV: ~1.7x

• Post-issue Price-to-Sales: ~5.3x

Both metrics sit below those of earlier consumer-tech listings, reinforcing the narrative that the Meesho IPO valuation is not overstretched.

Still, challenges persist. Meesho operates heavily in low-margin, unbranded categories, and competition from Amazon and Flipkart remains intense. Profitability is improving but not yet stable.

Yet, analysts see upside stemming from the platform’s uniqueness.
“They’ve left some money on the table,” Karkera said. “Downside seems limited because the valuation isn’t stretched, while upside may come from scarcity—very few listed companies offer pure-play exposure to social commerce.”

• Nifty 50
• Bank Nifty
• Sensex