The long-term outlook for Meesho is upbeat; here's why

BREAKING NEWS: E-Commerce Star Meesho Debuts on Dalal Street with Bumper 46% Premium

New Delhi, Dec 10, 2025 — Softbank-backed e-commerce player Meesho delivered a spectacular performance on its first day of trading on Dalal Street, signalling robust investor confidence in India’s booming digital commerce landscape. The company, known for its deep penetration into Tier-II and Tier-III cities, listed far above expectations, rewarding investors who managed to secure an allotment in the heavily oversubscribed Initial Public Offering (IPO).

The Listing: A Timeline of Bumper Returns

The debut on Tuesday was marked by significant premiums across both major Indian exchanges, transforming the company’s stock into an immediate market darling.

The shares listed at $\text{₹}162$ on the National Stock Exchange (NSE), commanding a premium of $\text{₹}51$ or $46\%$ over the upper end of the issue price band ($\text{₹}111$). Following the impressive start, the stock continued its upward trajectory, touching an intraday high of $\text{₹}172.80$ on the NSE, reflecting a $6.5\%$ gain from its listing price.

A similar positive momentum was observed on the BSE, where Meesho shares opened at $\text{₹}161.20$ and subsequently climbed approximately $7\%$ from the listing price to hit $\text{₹}172.50$. The strong showing surpassed even the optimistic projections from the unofficial grey market, which had seen unlisted Meesho shares trading at $\text{₹}154$, implying a grey market premium (GMP) of $38.74\%$ against the issue price.

Why the Debut Matters: The Power of India's Value Commerce

Meesho’s phenomenal debut transcends mere stock market enthusiasm; it is a powerful indicator of the public market’s growing appetite for high-growth, consumer-tech platforms that successfully tap into India’s vast, underserved non-metro markets.

Shivani Nyati, Head of Wealth at Swastika Investmart, commented on this significance, stating the strong listing "highlights robust investor appetite for India’s fast-growing digital commerce ecosystem and confidence in Meesho’s unique 'zero-commission' marketplace model."

This distinctive zero-commission model is central to Meesho’s success. Unlike major competitors, Meesho primarily generates revenue not from sales commissions, but through optional seller advertising, logistics, and fulfilment fees via its logistics arm, Valmo. This approach lowers the barriers for small sellers and enables Everyday Low Prices, driving massive volume and consumer adoption, particularly among price-sensitive users in Tier-II and Tier-III cities, which are fueling the next wave of Indian e-commerce growth.

The e-commerce market in India is forecasted to grow rapidly, with estimates suggesting the sector could exceed $300 billion by 2030. Meesho is strategically positioned to capture a disproportionate share of this growth by focusing on value and leveraging its asset-light logistics ecosystem.

Analyst Outlook: Structural Moats and a ₹200 Target Price

The positive listing was quickly followed by affirmative endorsements from leading domestic brokerages.

Choice Equity Broking has initiated coverage on Meesho with a resounding 'Buy' rating, setting a high target price of $\text{₹}200$. The brokerage highlighted three core pillars supporting its positive outlook:

1. Structural Competitive Moats: Meesho’s focus on the value-conscious segment and its seller-friendly model create defensibility.
2. Strong Monetisation Runway: The company has ample opportunity to boost revenue through advertising and value-added services as its scale grows.
3. Accelerating Path to Profitability: Efficiency gains, particularly through the scaling of its logistics network (Valmo), are expected to drive improved unit economics.

The brokerage projects Meesho to deliver a $31\%$ revenue CAGR between FY25 and FY28E. Notably, the report forecasts that the company’s Ebitda (Earnings before interest, taxes, depreciation, and amortisation) is projected to turn positive by FY27E.

The valuation comparison also suggests massive potential upside. Choice Equity Broking noted that Meesho currently trades at $2.4\text{x}$ FY28E Enterprise Value-to-Revenue (EV/Revenue), which is substantially lower than the peer average of $5.4\text{x}$. This discrepancy suggests that as Meesho’s fundamentals continue to strengthen and profitability becomes consistent, its valuation is likely to see significant appreciation.

IPO Background: The Race for Allotment

The remarkable listing premium was foreshadowed by the staggering demand witnessed during the subscription period, which ran from December 3 to December 5. The total issue size was subscribed an overwhelming $79.03$ times, attracting bids for nearly 22 billion equity shares against the 27.93 million shares available.

The demand was heavily institutional-led, a clear sign of faith from large-scale investors:

• Qualified Institutional Buyers (QIBs) led the charge, oversubscribing their allotted quota by a massive $121.18$ times.
• The Non-Institutional Investors (NIIs) segment saw subscription of $38.16$ times.
• Even the Retail Investors’ portion, typically seen as the most indicative of public sentiment, was subscribed by $19.08$ times.

This robust participation underscores the market’s conviction in Softbank-backed companies and the resilience of India's startup ecosystem, which has recently seen other major tech listings.

Meesho successfully raised $\text{₹}5,421.20$ crore through the IPO, which included both a fresh issue and an offer for sale (OFS). The final allotment was fixed on Monday, December 8.

The Road Ahead: Utilizing Capital for Hyper-Growth

The funds raised from the fresh issue component are earmarked for strategic investments designed to solidify Meesho’s long-term competitive edge, particularly in technology and logistics:

• Technology & AI: $\text{₹}1,390$ crore is allocated to enhancing cloud infrastructure at its subsidiary MTPL, and $\text{₹}480$ crore is designated for salaries for existing and new hires in its AI, Machine Learning, and core technology teams.
• Brand Building: $\text{₹}1,020$ crore is budgeted for marketing and brand-building efforts for MTPL.
• Future Expansion: The remainder is allocated to inorganic growth opportunities, strategic projects, and general corporate purposes.

Investor Caution: Managing Volatility

Despite the euphoric debut, analysts advise investors to remain level-headed. Shivani Nyati of Swastika Investmart cautioned that investors should be mindful of several factors, including:

• Competitive Pressures: Intense competition from larger incumbents like Amazon and Flipkart remains a constant threat.
• Regulatory Clarity: The need for regulatory clarity regarding deep discounting practices and small-seller protection could impact operations.
• Sustained Profitability: Meesho must prove its ability to sustain profitability amidst the ongoing industry price wars.

Nyati provided a clear strategy for allottees, suggesting, "Investors who received allotment may consider booking partial profits while holding the remaining position for medium to long-term gains, keeping a stop-loss around $\text{₹}130$ to manage potential volatility."

Our Final Thoughts

Meesho's listing is not just a successful IPO; it's a validation of India's value-first e-commerce model and the growing financial power of the nation's smaller cities. The stock’s immediate rally reflects widespread belief in its structural advantages—specifically the zero-commission model and its efficient logistics network, Valmo.

While the fundamental analysis suggests substantial long-term growth and a high price target, the counsel to book partial profits is prudent. The Indian tech market, while maturing, can still be prone to volatility. For investors with a long-term horizon, Meesho presents an opportunity to invest in a business uniquely positioned to serve the next 500 million online shoppers in India.

We will continue to track Meesho's market performance and its use of the newly raised capital to see if it can successfully navigate the competitive landscape and deliver on the promise of its $31\%$ revenue CAGR. The path to $\text{₹}200$ is now open, but it will require flawless execution.