Meesho IPO: Zero Commission Model In Focus After INR 2,440 Cr Anchor Round

India’s IPO pipeline is showing no signs of cooling down, with subscriptions for Meesho’s public issue set to open on Wednesday, December 3. 

The ecommerce major has raised INR 2,439.5 Cr from anchor investors for the initial public offering. Anchor investors subscribed to 21.98 Cr equity shares of the company at INR 111 apiece. 

Of these, 9.37 Cr equity shares, or 43% of the anchor round, were lapped up by 14 domestic mutual funds, including SBI, Aditya Birla Sun Life, Axis, HSBC, among others. Other prominent investors who participated in the anchor round were the Government of Singapore, Tiger Global, BlackRock and Fidelity, Morgan Stanley, among others. 

The Bengaluru-based company, whose IPO closes on December 5, is looking to raise INR 5,421 Cr through a fresh issue of INR 4,250 Cr and an offer for sale (OFS) component of roughly INR 1,100–1,200 Cr. A total of INR 1,810.5 Cr is up for bidding in the fresh issue portion after the anchor round.

With a proposed valuation of INR 50,000 Cr, Meesho is going public at a time when liquidity is shifting, big IPOs are crowding the market and investors are gradually warming up to fast-growing, loss-making internet companies. 

But, few companies entering the IPO queue this year have Meesho’s scale. The zero-commission platform is now India’s largest ecommerce player by orders and transacting users, a notable feat in a market long dominated by Amazon and Flipkart.

In the first six months ended September 2025, the ecommerce platform recorded 234.2 Mn annual transacting users with orders rising to 1,261.14 Mn. Annual transacting sellers grew to 7.06 Lakh, averaging 3,214.5 orders each.

The Big Question: Does The Valuation Add Up?

In terms of valuation, Meesho is said to be comparatively behind its consumer internet peers in the price-to-sales (P/S) valuation multiple. With respect to sales for FY25, Meesho is priced at a 5.3x P/S multiple, well below Eternal’s 14.33x, Lenskart’s 11.1x and Nykaa’s 9.43x. 

Analysts believe that the pricing for the IPO is more or less on the mark as Meesho’s grey market premium (GMP) has signalled a strong public market debut. A day ahead of its IPO, the premium for Meesho’s unlisted shares stood at INR 46. 

Besides this, brokerage firms have also maintained a bullish stance on the company’s public float. 

In its IPO note, ICICI Securities recommended that investors ‘Subscribe’ to the IPO, citing Meesho’s efficient business model and reasonable valuation. Besides, SBI securities and Aditya Birla Money have also given a ‘subscribe for long term; rating to the company’s IPO.

“Meesho’s zero commission business model catering to value conscious customers largely from tier 2 and tier 3 towns is a key differentiated compared with other listed tech-based consumer service companies in India,” ICICI Securities noted.

Speaking with Inc42 recently, CEO Aatrey doubled down on the zero commission model that has held Meesho in good stead, reiterating that the company won’t be introducing a platform fee moving forward. This should maintain Meesho’s differentiation over its rivals on the seller side. 

“Zero commission is core to our philosophy. We believe it eliminates barriers for merchants of all sizes, fostering a vibrant ecosystem. We’ve seen it work across categories, including Meesho Mall. In emerging markets like China, Southeast Asia, and Latin America, value ecommerce platforms thrive on similar models, with ads driving bottom lines,” he noted.

Despite the zero commission model, Meesho has managed to curtail losses by largely reducing the logistics costs associated with fulfilment. Meesho’s in-house logistics arm Valmo is a major factor in this turnaround, along with ad revenue from larger brands that have joined the marketplace in the past year. 

The ecommerce major’s revenue has scaled about 64% to INR 9,390 Cr in FY25 from INR 5,730 Cr in FY23. In H1 FY26, the company’s losses shrank 72% YoY to INR 701 Cr while revenue grew 29% YoY to INR 5,578 Cr. 

“Meesho has effectively cracked the asset-light marketplace model, enabling it to operate with materially lower fixed costs than traditional ecommerce peers. This structurally lean cost base allows the company to maintain tight control over operating expenses and supports superior cash-conversion economics,” said Prashanth Tapse, senior VP research analyst at Mehta Equities. 

Worth noting that despite the buzz around quick commerce, Meesho is not yet backing the trend, as Aatrey told us earlier this week. Simranjeet Singh, senior research analyst at Almondz Group, agrees with the logic. 

“Quick commerce requires a lot of investment and the break-even is uncertain. The decision also fits Meesho’s asset-light thesis. Unlike capital-intensive players such as Blinkit or Instamart, Meesho is avoiding high-burn dark-store operations,” he said.

This contrasts with the strategy of Amazon and Flipkart, both of which have entered the quick commerce segment in the last two years. Meesho’s reticence could be seen as an advantage when it comes to profits in the medium term, but one cannot rule out an entry in the longer run.  

India’s retail market is expected to grow at 20–25% CAGR from INR 83 Lakh Cr to nearly INR 135 Lakh Cr by FY30. Meesho seems focussed on this market opportunity even as it expands into areas like financial services, content commerce and AI-led products.

In terms of risk factors around Meesho’s IPO, SBI Securities flagged the company’s heavy dependence on retaining both customers and third-party sellers, reliance on external sellers for product variety/quality and exposure to product damage due to logistics partners. 

Plus, Meesho’s value-driven proposition and user acquisition strategy might yield results that actually increase margin pressure. Currently, the company is working on a razor-thin 4.95% net margin as of FY25 revenue base. 

After a strong anchor round, Meesho would be hoping that retail investors are equally enthusiastic about the issue when it opens tomorrow. A big show of faith from the public markets would give the company enough time to stretch its legs and unlock more efficiency in the long run.  

With a massive user base, clear positioning in non-metro India and an improving cost structure, Meesho enters the public market with both promise and pressure. Can its zero-commission moat deliver defensibility?

(With inputs from Lokesh Choudhary)

Edited By Akshit Pushkarna