Willing to apply for Meesho IPO? Check these key risks, strengths from RHP

Investors willing to apply for Meesho IPO can review the company's strengths and risks as outlined in its Red Herring Prospectus (RHP)

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Early grey market indications suggest favourable sentiment for the much-awaited initial public offering of e-commerce platform Meesho, which opens for public subscription tomorrow. Through its maiden share sale, the company aims to raise ₹5,421.20 crore, comprising a fresh issue of 332.9 million shares worth ₹4,250 crore and an offer for sale (OFS) in which promoters and existing shareholders will divest up to 105.5 million equity shares worth ₹1,771.20 crore.

 

The public issue is priced in the band of ₹105–₹111 per share, with a lot size of 135 shares, and will remain open for subscription until Friday, December 5, 2025.

 

In the grey market, Meesho’s unlisted shares were trading at around ₹156 per share, reflecting a grey market premium (GMP) of ₹45 per share, or 40.54 per cent over the upper end of the IPO price band.

 

Brokerages, meanwhile, have recommended subscribing to the IPO from a long-term perspective, citing Meesho’s strong outlook heading into FY26, supported by scaled flywheels, AI-led efficiencies through Meesho AI Labs and emerging growth levers such as content commerce, Meesho Mall and financial-services pilots. READ MORE    However, investors willing to apply for the Meesho IPO can review the company’s strengths and risks as outlined in its Red Herring Prospectus (RHP).

Key strengths of Meesho

Self-reinforcing platform flywheels: Meesho operates interconnected commerce, logistics and content-commerce flywheels that link consumers, sellers, logistics partners and content creators. These flywheels reinforce each other as scale expands, improving platform efficiency and value.

 

Technology-first, AI-driven approach: Technology underpins all aspects of the platform, supported by 1,182 tech employees, including 163 in ML and AI as of September 30, 2025. GenAI tools enhance code generation, development velocity and creative production across marketing and product teams.

 

AI/ML through BharatMLStack: BharatMLStack processes up to 2.85 PB of data daily, enabling trillions of feature retrievals and inferences. It powers real-time personalisation, pricing, automation and risk management, strengthening scalability for all stakeholders.

 

Scalable and innovative technology infrastructure:  Meesho’s flexible architecture supports 234.20 million Annual Transacting Users with high engagement levels. Its experimentation engine, Abacus, runs more than 498 concurrent tests monthly, enabling rapid feature rollout.

 

Trusted and capital-efficient growth model: The platform benefits from strong trust signals—over a billion ratings and hundreds of millions of reviews. Its asset-light model drives capital-efficient growth, scaling to 234.20 million users and 2,270.95 million orders in the twelve months ended September 30, 2025.

Key risks for Meesho

Continued losses and cash flow risks: Meesho has recorded losses since inception, reporting a restated loss before exceptional items and tax of ₹4,332.14 million in the six months ended September 30, 2025, and ₹1,084.29 million in FY25. It also registered negative operating cash flows in the same six-month period and in FY23. Failure to generate adequate revenue or control expenses may extend these losses.

 

Risks in attracting and retaining consumers: Inability to retain or acquire consumers, offer adequate support services or safeguard the “Meesho” and “Valmo” brands may affect business performance. Negative publicity or operational constraints could adversely impact results, cash flows and growth.

 

Dependency on seller participation: Challenges in attracting and retaining sellers may impact business stability, financial performance and cash flows. Seller disengagement can directly weaken supply availability and marketplace health.

 

Competitive and logistics-related risks: Meesho faces intense competition, and failure to respond effectively may erode market share. Heavy reliance on third-party logistics—five end-to-end partners in the six months ended September 30, 2025—creates risks stemming from service failures, interruptions or inconsistent delivery quality.

 

CoD, technology and preference-shift risks: With 72 per cent of shipped orders on cash-on-delivery during the six months ended September 30, 2025, cash handling inefficiencies and delivery failures remain elevated. Technology disruptions or inability to evolve the tech stack can undermine competitiveness, while sellers failing to keep pace with shifting consumer preferences may impact demand and revenue.