Meesho IPO: Should You Subscribe or Skip?
Meesho's IPO is making waves in the Indian stock market, with subscription numbers reaching an impressive 10.75 times by the third day. Investors are excited about this e-commerce platform's future, especially as the grey market premium suggests a potential listing gain of around 45%. The IPO is set to raise ₹5,421 crore, with a significant portion allocated for fresh share issuance.
Founded by Vidit Aatrey and Sanjeev Kumar, Meesho has established itself as a leader among e-commerce platforms in India. Its unique zero-commission business model caters to price-sensitive customers, particularly in tier 2 and tier 3 towns. This approach not only differentiates Meesho from its peers but also allows it to achieve impressive revenue growth. The company’s focus on customer satisfaction and retention is crucial to its success, especially in a competitive market.
The IPO consists of a fresh issuance of shares worth ₹4,250 crore, along with an offer for sale of 10.55 crore shares, bringing the total issue size to ₹5,421 crore. These funds will be utilized for enhancing cloud infrastructure, marketing initiatives, and supporting strategic growth through acquisitions.
As the IPO progresses, different investor categories are showing strong interest. The subscription rate for non-institutional investors is 9.18 times, while retail individual investors have shown a subscription rate of 9.14 times. This indicates a robust demand for Meesho shares, which is a positive sign for potential investors.
Investment analysts remain optimistic about Meesho's prospects, with ICICI Direct recommending a 'subscribe' rating based on the company's strong business model and consistent free cash flow generation. The anticipated listing price is approximately ₹160.5 per share, significantly higher than the IPO price of ₹111.
As investors await the final share allotment details, which will be announced on December 8, the anticipation around Meesho's market debut continues to grow. With its innovative approach and strong market position, Meesho could be a compelling opportunity for investors looking to capitalize on the booming e-commerce sector in India.
