Despite an explosive debut on the Indian exchanges, or possibly because of it, a few analysts scaled up the stock’s target price to Rs 200, or 80 per cent higher than the offer price (Rs 111). The listing gain for Meesho Ltd, an e-commerce platform, was more than Rs 50, or over 45 per cent, and higher than the pre-listing grey market premium of Rs 43. On the first trading day, Day Zero as CEO Vidit Aatrey described it, the stock scaled a high of over Rs 177, and ended at just over Rs 170, or over 50 per cent higher than the offer price.
At the listing ceremony, Aatrey said that there were still millions of Indians who had never transacted online, and this section that the firm wished to serve was just beginning to open. The narrative is backed by the events that began less than 10 years ago. Meesho started in a two-bedroom apartment in Bengaluru, where the founders worked on a dining table to find an entry point into online commerce. The original idea, FashNear, was a hyperlocal women’s fashion concept that never scaled up. Only when it targeted small makers, home-based sellers, and buyers in the smaller cities like Surat, Jaipur, and Panipat that the trajectory shifted.
This helped the platform to reach nearly 200 million transacting users in 2024-25, of which more than 170 million were from outside India’s top eight cities. The growing number of sellers, buyers, and orders excited the investors. The IPO was oversubscribed on the first day, with the final figure being nearly 80 times. The portion for the qualified institutions was oversubscribed by 120 times. The response from the retail investors was substantial, though less muted. The Net Market Value (Marketplace), or cumulative checkout value of successfully-delivered orders, went up from less than $200 billion in 2022-23 to nearly $300 billion in 2024-25.
However, the run-up to the listing day witnessed several debates, and controversies. During the pre-IPO anchor-investor allocation process, global funds like Capital Group and Norges Bank Investment Management, and domestic institutions like ICICI Prudential and Nippon India Mutual Fund withdrew from it. They were peeved because nearly a quarter of the anchor portion was allocated to a single entity, SBI Mutual Fund. They claimed that this raised an issue of fairness, and indicated discretionary and opaque allocation. Meesho and its bankers maintained that they had merely honoured prior commitments to SBI Mutual Fund.
As is usually the case with tech firms, the IPO valuation attracted attention. At Rs 111, Meesho’s worth is more than Rs 50,000 crore, which is now higher due to the gains on the first day. Whether such premium is justified, or can be sustained was the question that critics asked. They highlighted the financials. Although revenues were up by more than 60 per cent between 2022-23 and 2024-25, the annual losses were up by 135 per cent. But when one compares the first six months of 2024-25 and 2025-26, the revenues were up by nearly 30 per cent, and losses were down by more than 70 per cent.
Despite incurring losses, their reduction creates the perception that Meesho is undergoing a shift in financials, and profitability. Still, the firm’s average order value (AOV) was Rs 274 in 2024-25. A low AOV model requires extraordinary levels of operational precision, and cost control because each order implies a low margin. Small disruptions can distort the economics. Meesho processed 1.83 billion orders in 2024-25, with more than two billion in the 12 months ended June 2025. While this places it among the highest-volume platforms, the concentration of orders in mass market fashion and home categories makes volumes vulnerable to changes in discretionary spending.
Valmo, the parent firm’s logistics arm, grew into a massive parcel delivery operation. Media reports indicate that the former shipped 296 million parcels in Q1-FY26, which places it among the top handlers of e-commerce parcels. The share of shipments handled by Valmo rose from about two per cent in 2022-23 to 48 per cent in 2024-25, as Meesho moved more volume in-house. This increased density allows the delivery at lower costs compared to third-party logistics partners. This change is crucial for AOVs of Rs 274, where costs related to deliveries, and returns cannot escalate.
Such strength in logistics is a potential point of fragility. A surge in the return rates, for example, which is common in low-priced fashion, can raise reverse costs. Disruption in routing algorithms, fleet availability, or workforce supply can affect service levels. Regulatory scrutiny around how platforms use related-party arms can add to compliance costs, and complexity. Meesho depends on a network of small sellers, whose quality can vary widely, and the draft prospectus identifies this, and seller compliance as explicit risks.
Technology is a primary lever to stabilise such variables. The company’s discovery engine, cataloguing systems, and AI-driven classification tools are designed to handle fragmented inputs. In investor interactions before the IPO, Aatrey claimed that the technology was built to eliminate friction for the small sellers, rather than to replace them. This includes tools that standardise product attributes, match buyers to inventory pockets, and reduce failed deliveries. These backend systems may not be visible, but sit at the centre of the claims that Meesho can scale up low-value commerce.
Analysts contend that India’s e-commerce market is Rs 6 trillion, and will reach Rs 15-18 trillion by 2030. This indicates an annual growth rate of 20-25 per cent. The bulk of this growth is expected to come from Tier 2, and 3 cities, and smaller towns. Meesho’s user base in these smaller markets makes it a proxy for consumption trends beyond the metros. This positioning will play a role in how sellers, buyers, and investors frame the company in the future. Strong adoption may make it a long-term bet. Any slowdown in rural or small-town spending can, however, magnify the challenges.
The quarter-to-quarter path in the future will be shaped by several scenarios. If Meesho can continue improving its take rate through value-added services, advertising, and logistics, and maintain cost discipline, it is positioned to strengthen cash flows. If competition intensifies in the mass market segment, discounting pressures may rise. Regulatory oversight of marketplaces and logistics compulsions, especially around quality and accountability, may hike compliance costs. If consumer sentiments weaken, the spend on discretionary categories that anchor Meesho’s volumes may witness volatility. The experience may establish whether mass market e-commerce can deliver financial viability for firms, valuation gains to investors, and easy product accessibility for the consumers.
