Meesho IPO Frenzy: Day 1 Subscription Surges Over 2X! Retail Investors Pile In – Next E-commerce Giant?

The much-awaited Initial Public Offering (IPO) of Softbank-backed e-commerce platform Meesho commenced public subscription on Thursday, December 3, 2025. The company is looking to raise a total of ₹5,421 crore through its IPO, which comprises a fresh issue of shares worth ₹4,250 crore and an offer for sale (OFS) amounting to ₹1,171.2 crore.

The first day of bidding saw overwhelming investor interest, with the issue being subscribed 2.35 times. A total of 654 million equity shares were bid for against the 277.93 million shares offered. Retail investors led the charge, subscribing their reserved portion 3.85 times, indicating strong interest from individual investors. Qualified Institutional Buyers (QIBs) booked 2.12 times their quota, while Non-Institutional Investors (NIIs) subscribed 1.8 times.

As of 11:20 AM on December 4, the second day, the IPO's subscription level rose to 3.22 times, with bids received for 894.86 million shares. The three-day subscription period is set to conclude on Friday, December 5.

Analyst Opinions

Brokerage firms largely recommend a 'Subscribe' to Meesho's IPO, citing its strong growth potential and differentiated business strategy.

• Nirmal Bang Securities highlighted Meesho's strong presence in tier 2 and 3 cities, driven by its zero-commission, asset-light model. They noted that while the company is yet to report profits, it has achieved positive free cash flow in FY25. The brokerage finds the upper price band valuation reasonable at 5.7x FY25 Price/Sales.
• Swastika Investmart emphasized Meesho's 'scarcity premium' as India's only pure-play value e-commerce stock. They consider its valuation of approximately 5.5x FY25 Price-to-Sales attractive compared to peers like Zomato (>10x Sales) and recommend it for both listing gains and long-term investment.
• ICICI Securities pointed out that Meesho's focus on value-conscious consumers in non-metro areas, coupled with its efficient business model, has led to strong revenue growth and consistent free cash flow. They also noted its valuation is at a discount to close peers.
• Mehta Equities sees Meesho as a leader in categories like Fashion, Home & Kitchen, and Beauty & Personal Care. They cited its multi-sided marketplace, network effects, AI-driven personalization, and efficient logistics arm (Valmo) as key strengths. Despite ongoing investments in growth leading to negative profitability, they recommend subscribing for risk-seeking, long-term investors.

Importance of the Event

• Meesho's IPO is a significant event for India's booming e-commerce sector.
• It offers investors a chance to invest in a unique, value-focused online retail player.
• The strong initial subscription indicates robust investor appetite for promising tech IPOs.

Impact

• A successful IPO could boost investor confidence in Indian e-commerce and tech stocks.
• It validates the asset-light, zero-commission business model in the online retail space.
• Positive market reception could encourage other tech startups to pursue public listings.
• Impact Rating: 8/10

Difficult Terms Explained

• IPO (Initial Public Offering): The process by which a private company offers its shares to the public for the first time.
• Fresh Issue: When a company issues new shares to raise capital.
• Offer for Sale (OFS): Existing shareholders sell a portion of their shares to new investors.
• Subscription: The total number of times an IPO issue has been bought by investors compared to the number of shares offered.
• Retail Investors: Individual investors who apply for shares up to a certain limit (usually ₹2 lakh in India).
• QIBs (Qualified Institutional Buyers): Large institutional investors like mutual funds, pension funds, and insurance companies.
• NIIs (Non-Institutional Investors): High-net-worth individuals and corporate bodies who invest amounts above the retail limit.
• Free Cash Flow: The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.
• Price/Sales (P/S) Ratio: A valuation metric that compares a company's stock price to its revenue per share.
• MAUs (Monthly Active Users): The number of unique users who engage with a digital product or service in a given month.