Meesho IPO: How will the company utilise ₹5,421 crore of IPO funds?

Meesho has launched its Initial Public Offering (IPO), which is a book-built issue of Rs. 5,421.20 crore. The issue comprises a fresh issue of 38.29 crore shares aggregating to Rs. 4,250.00 crore and an offer for sale of 10.55 crore shares aggregating to Rs. 1,171.20 crore with a face value of Rs. 1 each.

Meesho Ltd IPO opened for subscription on December 03, 2025, and closes on December  05, 2025, with the price band set at Rs. 105 to 111 per equity share. Meesho Ltd IPO will list on BSE and NSE, with a tentative listing date fixed as December 10, 2025. 

In this article, let’s explore their current GMP, their subscription details, and how the company will utilize Rs. 5,421 crore of IPO funds.

GMP of On Meesho Ltd IPO

As of December 03, 2025, the shares of Meesho Ltd in the grey market were trading at a 44.14 percent premium. The shares in the Grey Market traded at Rs. 160. This gives it a premium of Rs. 49 per share over the cap price of Rs. 111.

Subscription Details

Meesho Ltd.’s Rs. 5,421.2 crore initial public offering (IPO) was fully subscribed by retail investors within the first hour of opening on Wednesday, December 3. Investors placed bids for 11.75 crore shares, accounting for 42% of the total 27.79 crore shares on offer.

Within a few hours of opening, the IPO had seen an overall subscription of 0.42 times. Retail investors showed strong demand, bidding 1.57 times the shares allocated to them, whereas non-institutional investors subscribed to just 0.49 times their portion.

Meesho’s IPO Objectives Highlights 

Meesho’s draft IPO filings have revealed a noteworthy detail that has drawn attention from market observers. 

Salaries for AI and Core Teams

The e-commerce company intends to allocate Rs. 480 crore from its public issue specifically to cover the salaries of its AI, machine learning, and core technology teams. This allocation is notable not only for its magnitude but also for being one of the largest personnel-focused expenditures in recent tech IPOs.

With just over 2,000 permanent employees, the size of this planned outlay is particularly striking for potential investors. Meesho has categorized this expense as part of a broader initiative to strengthen and expand its technology capabilities.

Cloud and Infrastructure Expansion

In addition to workforce investment, Meesho plans to allocate Rs. 1,390 crore to enhance cloud capabilities through its subsidiary MTPL. This indicates the company’s intent to scale operations efficiently and leverage technology for better service delivery.

Marketing and Brand Building

Another Rs. 1,020 crore is earmarked for brand building and marketing, showing that Meesho is balancing its technology investments with efforts to expand its market presence and customer base.

Collectively, these investments represent one of the most technology-focused spending strategies among upcoming consumer internet IPOs. Meesho seems to be betting that the next phase of growth in Indian e-commerce will be driven by automation, data-driven operations, and more personalised customer experiences.

The company has set clear limits on how it will use the money raised from its IPO. In total, no more than 35% of the IPO funds will go toward acquisitions and general corporate expenses.

Specifically, only up to 10% of the total funds can be spent on acquisitions and strategic investments. The exact allocation within these categories will be decided after the offer price is set and will be included in the prospectus submitted to the Registrar of Companies.

The Spending on general corporate purposes alone will be capped at 25% of the total IPO proceeds, according to the updated DRHP.

Financial Analysis of Meesho Ltd

The company has shown fluctuating financial performance in recent years. Total Income increased from Rs. 5,897.69 crore in FY23 to Rs. 7,859.24 crore in FY24, then increased to Rs. 9,900.90 crore in FY25, with Rs. 5,857.69 crore recorded for the quarter ended September 30, 2025.

Profit After Tax (PAT) remained negative but showed signs of improvement, with a loss of Rs. 1,671.90 crore in FY23, reducing to a loss of Rs. 327.64 crore in FY24, then a larger loss of Rs. 3,941.71 crore in FY25, and a loss of Rs. 700.72 crore for the quarter ended September 30, 2025.

Overview of Meesho Ltd IPO

Meesho Limited, Incorporated in 2015, is a multi-sided technology platform driving e-commerce in India by connecting four key stakeholders: consumers, sellers, logistics partners, and content creators by operating under the brand name Meesho, the company enables consumers to access a wide range of affordable products while offering sellers a low-cost platform to grow their businesses.

The company has demonstrated strong operational growth, with a steady rise in placed orders and a broadening base of transacting users and sellers. For the twelve months ended September 30, 2025, Meesho reported 706,471 annual transacting sellers and 234.20 million annual transacting users.

Meesho’s logistics network, operated under the brand Valmo, integrates third-party logistics providers, including first- and last-mile delivery partners, sorting centres, and truck operators, to ensure efficient order fulfilment across India. As of September 30, 2025, the company employed 2,082 full-time employees.

Written by Sridhar J 

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