Meesho Picks Morgan Stanley, Two Others As Bankers For IPO

Stepping up its efforts to go public later in the year, ecommerce major Meesho is reportedly planning to raise $1 Bn through an initial public offering (IPO). 

Source told Moneycontrol that “discussions are on and the company has already picked Morgan Stanley, Kotak Mahindra Capital and Citi as advisers for its IPO.”

Meanwhile, another source told the publication that while Meesho is aiming to raise $1 Bn, bankers have pitched a valuation of $10 Bn.

“It is likely that even JP Morgan will be added to the IPO syndicate if talks materialise,” the source added.

Inc42 has reached out to Meesho for comments on the development. The story will be updated based on the response.

Sources also confirmed that Meesho will be filing its draft documents over the coming weeks.

This comes just close to two months after the ecommerce giant secured a fresh funding from investors Tiger Global, Think Investments, and Mars Growth Capital of between $250 Mn and $270 Mn to take its funding round total to approximately $550 Mn.

The deal is expected to have valued Meesho at about $3.9-4 Bn, as per sources, which is around 20% decrease from its last valuation of $4.9 Bn.

In December last year, Meesho’s backer Prosus revealed in its investor presentation of H1 FY25 that it is one of the potential companies to be listed on the bourses in 18 months.

Reports also suggest that the company has also filed an application with the National Company Law Tribunal (NCLT) Bengaluru to shift its domicile to its Indian unit Fashnear Technologies, which would clear path for its upcoming plans of hitting the bourses.

Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho claims to have over 15 Lakh sellers on its ecommerce platform from across India. The startup also claims to have more than 140 Mn annual transacting users.

Meesho counts DST Partners, Elevation Capital, Facebook and Prosus among its investors.

Meesho managed to narrow its net loss by 81.8% to INR 304.9 Cr in the financial year 2023-24 (FY24) from INR 1,675 Cr in the previous year. Its operating revenue zoomed 32.8% to INR 7,614.9 Cr in FY24, from INR 5,734.5 Cr, a year ago. 

Broader IPO Outset: The development comes at a time when numerous startups including Zetwerk, Groww, Physics Wallah have onboarded bankers for their potential plans of market debut in the upcoming financial year.

Since January, companies including Licious, Zetwerk and Pine Labs, to name a few have reportedly initiated their work towards public listing as well.

Ecommerce Pivoting To Quick Delivery Model: India’s ecommerce sector is getting increasingly competitive as platforms try to reduce delivery time to same-day or next-day or even two-four hours and expand their urban reach, driven by quick commerce players.

Ecommerce players such as Myntra and Nykaa have called their shots in 2024, piloting in select regions of the country. Myntra began to offer a 30-minute to 2-hour delivery feature in some parts of Bengaluru, in November 2024 via its “M-Now” offering. Meanwhile, Nykaa also launched a 10-minute delivery pilot in select parts of Mumbai, in October last year.

On the other hand, bigger giants such as Amazon and Flipkart have also rolled out their quick commerce offerings called Tez and Minutes, respectively.

Based on Inc42’s Indian Tech Startup Funding Report 2024 the ecommerce startups raised a sum of $1.5 Bn in the past year, enduring a 42% annual decline, from the $2.6 Bn funding secured in 2023.

With almost every product category being included in the quick commerce brands’ aisles, it has posed a challenge to the offerings of traditional ecommerce platforms, pushing them to shrink their delivery timelines to retain their market share.

Given the current scheme of things, the Indian ecommerce market is expected to breach the $400 Bn mark by 2030.