Meesho, India’s popular budget e-commerce platform, is making headlines as it gears up for an initial public offering (IPO). Backed by SoftBank, Meesho recorded remarkable growth in FY24, narrowing its losses and achieving profitability. With over 187 million Annual Transacting Users (ATUs) and 1.3 billion orders placed by December 2024, Meesho is well-positioned to make a strong impact on Dalal Street. As Meesho plans for IPO, here’s a look at its financials in FY24 and what potential investors can expect.
Meesho IPO: A Game-Changer in the Indian E-Commerce Space
Meesho is all set to revolutionize the Indian e-commerce market with its upcoming IPO. With the company reportedly eyeing a $1 billion initial share sale, the market is abuzz with anticipation.
Why is Meesho Planning an IPO Now?
The decision to go public comes after Meesho achieved a significant milestone—profitability in FY24. The e-commerce giant’s move to list its shares will help the company secure funds for expansion, enhance brand recognition, and attract institutional investors.
What is Meesho’s Target Valuation?
According to reports from Moneycontrol, Meesho is looking at a valuation of approximately $10 billion. This valuation reflects the company’s strong market position and growing user base.
As Meesho Plans for IPO, Here’s a Look at Its Financials in FY24
Meesho witnessed a dramatic improvement in its financial health in FY24.
Reduction in Losses: A Positive Indicator
Meesho successfully narrowed its losses to ₹53 crore in FY24, down from a massive ₹1,569 crore in FY23. This remarkable reduction highlights the company’s efforts toward cost optimization and better financial management.
Revenue Growth: A 33% Surge
Meesho’s revenue surged by 33%, reaching ₹7,615 crore in FY24 compared to ₹5,735 crore in FY23. This growth was fueled by an increase in unique annual transacting users and higher order frequency from existing customers.
Free Cash Flow: Turning Positive
For the first time, Meesho generated positive free cash flow of ₹197 crore in FY24. This marked a significant milestone, positioning Meesho as the first Indian horizontal e-commerce firm to achieve this feat.
Key Metrics Driving Meesho’s Success in FY24
Meesho’s financial success in FY24 was driven by several key factors:
1. Surge in Annual Transacting Users (ATUs)
With ~187 million ATUs, Meesho captured around 13% of the Indian market. This growing user base underscores Meesho’s ability to attract and retain customers.
2. Increase in Order Frequency
Orders placed on Meesho’s platform grew to 1.3 billion by December 2024, reflecting increased order frequency and diverse purchases across categories.
3. Growth in Popular Categories
Meesho witnessed impressive growth in categories such as:
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Home & Kitchen
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Beauty & Personal Care
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Baby Essentials
CEO Vidit Aatrey’s Vision: Focus on Free Cash Flow
Vidit Aatrey, Meesho’s CEO and founder, emphasized the importance of focusing on Long Term Free Cash Flow (FCF) per share. He highlighted that traditional metrics like PAT or EBITDA do not always capture the true financial health of a business, especially in inventory-based e-commerce.
Why Focus on Free Cash Flow?
Aatrey explained that focusing on FCF allows Meesho to account for factors such as:
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Working Capital Requirements
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Capital Expenditures
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Sustainable Growth
Meesho’s IPO Plans: What’s Next?
Meesho’s IPO plans are in full swing, with the company finalizing leading investment banks to oversee the process.
Bankers on Board for Meesho’s IPO
Meesho has roped in Kotak Mahindra Capital, Morgan Stanley, and Citi as its bankers for the IPO. These financial giants will guide Meesho through the listing process, ensuring a successful public debut.
When Will Meesho IPO Hit Dalal Street?
Meesho is expected to file its draft IPO papers in the coming weeks, aiming to list its shares around Diwali 2025.
How Much is Meesho Expected to Raise from IPO?
Reports suggest that Meesho aims to raise around $1 billion from its initial public offering. This capital infusion will be critical for scaling its operations and enhancing technological infrastructure.
Factors Contributing to Meesho’s IPO Success
Several factors position Meesho for a successful IPO:
1. Strong User Base and Brand Loyalty
With a massive user base of 187 million ATUs, Meesho has built a loyal customer base that trusts its platform.
2. Diversified Product Portfolio
Meesho offers a wide range of products, from household essentials to fashion and beauty, catering to the diverse needs of Indian consumers.
3. Proven Profitability and Growth
Achieving profitability and generating free cash flow in FY24 gives Meesho a strong foundation to attract investors.
Challenges and Risks Ahead for Meesho IPO
While Meesho’s IPO prospects look promising, the company faces certain challenges that investors should consider.
1. Intense Competition in E-Commerce
Meesho operates in a highly competitive e-commerce space dominated by giants like Amazon, Flipkart, and Reliance’s JioMart.
2. Regulatory Challenges
Stringent regulatory norms for e-commerce platforms could pose challenges post-IPO.
3. Market Volatility and Economic Conditions
Market conditions and investor sentiment could impact Meesho’s IPO valuation and subscription levels.
Future Projections: What Lies Ahead for Meesho?
Meesho’s journey post-IPO is expected to focus on:
1. Expansion into Tier 2 and Tier 3 Cities
Meesho aims to tap into India’s burgeoning demand from smaller cities and rural areas.
2. Strengthening Technology and Logistics Infrastructure
With fresh capital, Meesho plans to enhance its tech and logistics capabilities, ensuring seamless customer experiences.
3. Exploring International Markets
Meesho may explore opportunities beyond India, expanding its footprint in international markets.
FAQs About Meesho IPO
1. When is Meesho expected to launch its IPO?
Meesho is likely to hit the stock market around Diwali 2025, with draft IPO papers expected to be filed soon.
2. How much is Meesho planning to raise through its IPO?
Meesho aims to raise approximately $1 billion through its IPO.
3. What is Meesho’s current valuation target?
Meesho is targeting a valuation of around $10 billion for its IPO.
4. Who are the bankers managing Meesho’s IPO?
Meesho has appointed Kotak Mahindra Capital, Morgan Stanley, and Citi as bankers for its IPO.
5. What was Meesho’s financial performance in FY24?
Meesho narrowed its losses to ₹53 crore, recorded a 33% increase in revenue, and generated positive free cash flow of ₹197 crore in FY24.
6. What categories contributed to Meesho’s growth in FY24?
Categories such as Home & Kitchen, Beauty & Personal Care, and Baby Essentials witnessed significant growth on the Meesho platform.
Conclusion: A Bright Future for Meesho IPO
As Meesho gears up for its IPO, the company is poised to make a significant impact on the Indian e-commerce landscape. With a strong financial performance in FY24, a growing user base, and a diversified product portfolio, Meesho’s IPO is expected to attract substantial investor interest. As the company prepares to enter the public markets, all eyes are on Meesho’s next move and the potential for high returns for investors.
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