Management

• Vidit Aatrey (Promoter, Chairman, Managing Director & Chief Executive Officer)
• Sanjeev Kumar (Promoter & Whole-time Director, Chief Technology Officer)
• Mohit Bhatnagar (Non-Executive Non-Independent Director)
• Mukul Arora (Non-Executive Non-Independent Director)
• Rohit Bhagat (Independent Director)
• Hari Shanker Bhartia (Independent Director)
• Surojit Chatterjee (Independent Director)
• Kimsuka Narasimhan (Independent Director)
• Rahul Bhardwaj (Company Secretary & Compliance Officer)
• Dhiresh Bansal (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 5421 cr which comprises of offer for sale of Rs.1171 cr and fresh issue of 4250 cr. The company intends to use the issue proceeds towards investment for cloud infrastructure, in MTPL, subsidiary (Rs.1390 cr), Payment of salaries of the existing and replacement hires for the Machine Learning and AI and technology teams for AI and technology development undertaken by MTPL, the Subsidiary(Rs.480 cr), Investment in MTPL, for expenditure towards marketing and brand initiatives (Rs.1020 cr) and funding inorganic growth through acquisitions and other strategic initiatives and general corporate purposes.

Competitive Strengths

Self-Reinforcing Flywheels Driving Scalable, Efficient Growth Meesho’s core strength lies in its interconnected, self-reinforcing flywheels across commerce, logistics and content. The commerce flywheel expands as affordable pricing and wide assortment attract more consumers, drawing additional sellers and improving product freshness and competitiveness. The logistics flywheel lowers fulfilment costs through Valmo’s multi-partner orchestration, enabling sellers to list lower-value products and driving higher order volumes. The content commerce flywheel enhances product discovery, engagement and conversions through creator-led videos and live streams. These flywheels generate rich data that continuously strengthens AI-driven decisioning, creating powerful network effects, accelerating growth and establishing high barriers to entry.

India-Centric Product Design and Advanced AI Infrastructure A key strength of Meesho is its India-first product and technology design, tailored to the diverse needs of users across regions, languages and device constraints. Its lightweight, intuitive app supports 10 languages and offers multi-modal search—text, voice and image—enhanced by AI models that interpret ambiguous or colloquial queries. GenAI-driven customer support resolves over half of consumer queries, improving speed and user experience. Meesho’s proprietary GeoIndia LLM converts unstructured Indian addresses into precise coordinates, strengthening logistics accuracy. Additionally, AI-powered ad tools simplify campaign management for small sellers, enabling effective discovery without marketing expertise or large budgets.

Culture of Rapid Experimentation and Sustainable Everyday Low Prices Meesho’s strength lies in its ability to innovate continuously while maintaining a value-first proposition for consumers. Its experimentation engine, Abacus, enables rapid testing and scaling of new ideas, powering an average of 498 concurrent experiments per month and enabling 56 new feature releases monthly. This agility enhances user experience and platform efficiency. Simultaneously, Meesho’s zero-commission model and low-cost fulfilment structure reduce the average cost charged to sellers, allowing them to offer competitively priced products consistently. Supported by scale-driven efficiencies and a technology-first, asset-light model, Meesho delivers sustainable “Everyday Low Prices” without relying on flash sales or heavy discounting.

Capital-Efficient, Asset-Light Scalability Meesho’s asset-light platform model is a core strength, enabling rapid, capital-efficient growth without owning inventory, logistics infrastructure or private labels. By leveraging the capacity of millions of sellers and third-party logistics partners, Meesho avoids the heavy capex typical of traditional retail or inventory-led e-commerce. This structure supports faster scalability, higher returns on capital and stronger free cash flow generation. The model’s effectiveness is evident in Meesho’s scale expansion with annual transacting users grew from 136.40 million in FY23 to 198.77 million in FY25 and 234.20 million in the LTM Sept-2025.

Peer Comparison

Key Risks & Concerns

Sustained Losses, Cash Flow Volatility and Execution Risks Meesho’s rapid scale-up has required significant investments in technology, marketing and reorganization, resulting in continued net losses, negative Adjusted EBITDA and periods of negative operating cash flow. Profitability remains dependent on sustained growth in users, order frequency and low-cost product access—factors vulnerable to competition, market shifts and regulatory changes. With limited experience operating at its current scale, forecasting demand, managing expenses and executing new initiatives carries uncertainty, posing material financial and operational risks.

High Dependence on Third-Party Logistics and Valmo Reliability Meesho relies entirely on third-party logistics partners—via Valmo or end-to-end providers—to fulfil all orders, exposing it to service disruptions, capacity constraints, inconsistent delivery quality and contract non-renewal risks. Operational challenges such as weather, political events, infrastructure issues, or partner inefficiencies can lead to delays, cancellations and consumer dissatisfaction. Valmo adds further dependency on smaller fragmented players and robust tech infrastructure. Any breakdown in logistics performance or CoD cash handling could materially impact Meesho’s reputation, costs and operational outcomes.

High Dependence on Cash-on-Delivery Increases Operational and Financial Risk Meesho’s heavy reliance on CoD—72% of shipped orders in the six months ended September 2025—creates significant operational inefficiencies, lower delivery success rates and heightened cash-handling risks. CoD orders face higher refusal and return rates, increasing logistics costs and reducing reliability. Dependence on smaller Valmo partners amplifies risks of delayed or incomplete cash remittance, evidenced by past vendor non-deposit incidents. Despite initiatives to promote prepaid adoption, persistent CoD usage may continue to strain operations, cash flows and seller experience.

Intense Competitive Pressure Across E-Commerce and Retail Ecosystems Meesho operates in a highly competitive environment against large horizontal marketplaces, vertical specialists, offline retailers, and emerging models like quick commerce and content-led platforms. Competitors often possess stronger brands, deeper capital pools, and more advanced logistics or technology capabilities, enabling aggressive pricing and seller incentives. Rising consumer expectations for speed, service quality and personalization further heighten the competitive bar. If Meesho cannot continuously differentiate through cost efficiency, innovation and user experience, its market share, growth and profitability may be adversely impacted.

Outlook and Valuation

Meesho’s medium-term outlook remains anchored in its ability to expand user penetration, deepen transaction frequency, enhance monetisation and sustain capital-efficient scale-up—positioning it as a structurally advantaged player in India’s fast-growing value-driven e-commerce ecosystem. The company aims to capitalise on India’s significant unpenetrated digital commerce opportunity, where 692–706 million smartphone users contrast with only 250–270 million online shoppers. With a demonstrated track record of user expansion—ATUs growing at a 20.7% CAGR between FY23–FY25 and 33.8% YoY in the LTM ended September 2025—Meesho is well placed to onboard the next 100–150 million value-conscious consumers, particularly from non-metro regions where it already commands deep engagement.

Growth is expected to be driven by a combination of new user acquisition and maturing behaviour from existing cohorts. Rising Order Frequency—from 7.51 in FY23 to 9.70 in the LTM September 2025—shows meaningful improvement in retention and relevance. Management’s focus on expanding assortment, improving product discovery and scaling high-frequency categories such as daily essentials is likely to further increase purchase occasions per user. The company also plans to enhance brand visibility through sustained marketing investment, supported by declining CAC trends over the long term. In parallel, reinforced platform safeguards and risk management tools should strengthen trust among both consumers and sellers, reducing friction and improving reliability. A key enabler of Meesho’s growth ambition is continued investment in technology. The expansion of Meesho AI Labs signals a strong commitment to frontier AI capabilities, with applications across search, discovery, personalised feeds, transaction risk management and ad optimisation. These innovations can materially elevate user experience and seller productivity while lowering operational costs. Additionally, enhancements to cloud infrastructure and internal systems will support higher peak loads and increased engagement across stakeholders. The ability to translate experimentation into real, scalable outcomes demonstrated by Abacus powering nearly 500 concurrent monthly experiments positions Meesho to continuously refine the platform and respond to fast-evolving consumer expectations.

On monetisation, Meesho is shifting from a pure transaction-led model to a diversified, multi-layered revenue strategy. Marketplace revenue grew from ₹57.3 billion in FY23 to ₹93.9 billion in FY25, supported by rising adoption of fulfilment, advertising and insights services. Advertising has emerged as a particularly strong lever, with sellers achieving 8.6x to 13.5x returns on ad spend, making it a sticky and scalable revenue stream. New initiatives such as financial services offered through regulated partners and Meesho Mall (a branded commerce destination) provide incremental high-margin monetisation vectors while reinforcing platform stickiness. As scale expands, operating leverage and low capital intensity are expected to translate into sustained improvement in free cash flow. Horizon 2 initiatives, including local low-cost logistics for essentials, creator-led commerce and AI-enabled support services, provide meaningful optionality for long-term growth. Meesho’s selective approach to incubation focusing on unit economics and product-market fit reduces risk while creating pathways for future expansion. Strategic acquisitions may further strengthen capabilities in technology, logistics, or new product categories. Overall, Meesho is well positioned to deepen its leadership in India’s value e-commerce landscape. Execution on scaling, monetisation, AI-led efficiency gains and user trust will be key, but the platform’s network effects, asset-light model and innovation engine provide a strong foundation for sustainable growth and improving profitability over the medium term. Meesho is valued at 5.3x Price to Sales based on FY25 sales. We recommend a SUBSCRIBE rating for the issue.