SEBI Greenlights Meesho's Mega-IPO: What's Inside The $7-8B Offer?

Securities markets regulator, SEBI (Securities and Exchange Board of India) has given an official green signal to Meesho IPO (Initial Public Offering). This is considered as one of the highly anticipated moves in the Indian startup ecosystem. The e-commerce player is backed by SoftBank. Meesho had filed its confidential papers in Jul 2025. It’s making strides towards its public issue, one of the largest tech listings of the year.

Through this public issue, the company is looking to raise a total of $700-800 million (approximately ₹6,600 crore). Meesho plans to achieve this target through a primary (fresh) issue of shares worth $485 million (₹4,250 crore) and an Offer for Sale (OFS) component of $200-300 million. Meesho is the first major Indian company in horizontal e-commerce to proceed with a public issue as a promoter-run entity. Thus, its Upcoming IPO announcement is a landmark event. With the regulatory nod secured and the offer details now public, the critical question for the market is: what does this offer truly look like, and is the e-commerce disruptor ready for the scrutiny of the public markets?

What Is The Breakdown Of The Offer?

This IPO is a large-scale capital-raising event. It aims to value the company at a massive $7-8 billion. This is a substantial jump from its last private funding round, which valued the company at nearly $4 billion. This is also a signal of strong investor interest in its high-growth story.

The offer is structured as per the below bifurcations.

• Fresh Issue - A fresh issue of shares to raise ₹42,500 million (As per UDHRP) is the primary component of the IPO. The company has stated to use these funds for strategic purposes, including bolstering its technology infrastructure, investing in brand building, and funding general corporate needs.

• Pre-IPO Placement - Meesho is also exploring a pre-IPO placement of up to ₹850 crore ($100 million). Provided the successful placement completion, Meesho has clarified that this amount will be deducted from the total fresh issue size, reducing the amount raised from the public.

• Valuation Strategy - The $7-8 billion valuation target is perceived as slightly more conservative than the $10 billion valuation the company was reportedly eyeing earlier. To ensure strong subscription and "leave some money on the table" for incoming retail and institutional investors, this may be a calculated move. It can also be a lesson learned from the volatile tech listings of previous years.

The book-building process is expected to take another 30-45 days. The final price band is to be watched closely. However, beyond the fresh capital, who is selling their stake, and what does it signal us?

Who Is Selling, And Why Is It Significant?

The Offer for Sale (OFS) component, involving 175,696,602 equity shares, is noteworthy for its participants (as per UDHRP document). It has a sectoral signal beyond its size. Meesho has clarified that the OFS (Offer For Sale) is "not very large. " Furthermore, the investors and promoters will be collectively selling only a 4-5% stake.

The list of selling shareholders includes some of the earliest backers of the company.

• Y Combinator: Selling up to 30,500,387 equity shares
• Elevation Capital: Selling up to 55,419,179 equity shares
• Peak XV Partners (formerly Sequoia): Selling up to 30,500,387 equity shares
• Venture Highway (now part of General Catalyst): Also participating in the OFS, selling up to 15,703,140 equity shares

Co-founders Vidit Aatrey and Sanjeev Barnwal are joining a new class of startup executives who are opting to be formally tagged as "promoters," rather than simply professional managers.

This is a crucial distinction. It has attached a higher degree of accountability and long-term commitment. Together, the co-founders have held a combined stake of ~18.51% (as per UDHRP document).

While they are participating in the OFS, their sale is minimal. Both Aatrey and Kumar will offload only 11.8 million shares each. This would amount to a stake of <0.2% each. This is a token sale, likely for liquidity and to meet offer requirements. It is not a significant promoter exit. It signals their continued conviction in the company's future.

What Do The Financials Look Like?

Meesho is not yet profitable, but the headline numbers are misleading. The company's financials show a clear "growth over profits" strategy, aimed squarely at capturing the massive market in India's Tier-2 and Tier-3 cities.

Here's the financial picture, decoded:

• The company reported a Net Loss of ₹3,941 crore in FY25.
• This staggering number was the result of a one-time "exceptional item" and expenses related to "flipping" its company domicile from Delaware, USA, back to India, a complex and costly but necessary process for any company wishing to list on Indian exchanges.
• Without this exceptional item, Meesho’s loss (before tax and exceptional items) stood at ₹108 crore in FY25. This is a dramatic improvement from its ₹305 crore loss in FY24 (on a ₹7,615 crore revenue).
• The company's growth-first strategy continues. In the first quarter of the current fiscal year (Q1FY26), Meesho reported a ₹289 crore net loss.

The company has a massive addressable market, a proven model for attracting millions of small sellers and consumers, and a clear path to market leadership. However, this comes with a high cash burn as it prioritises growth. This IPO will be an actual test of the public market's appetite for a high-growth, promoter-led e-commerce giant that is still firmly on the path to profitability.

Source

Moneycontrol
The Arc
Livemint
The Economic Times
CNBC TV 18