Meesho Unveils INR 411 Cr Bonus Share Plan Ahead of IPO

A plan to issue 411.4 Cr bonus shares has been authorised by Meesho's shareholders before the e-commerce giant files its draft red herring prospectus (DRHP) with SEBI, the market regulator.

The proposal to issue bonus shares of INR 1 each to equity owners in a 47:1 ratio was accepted by the members at an extraordinary general meeting on May 31, according to the company's MCA filings.

The filing stated that the board of directors has been given the members' consent to issue 411.4 Cr bonus equity shares worth INR 1 each, which will be credited as fully paid-up shares to the holders of the company's existing equity shares.

The company's paid-up share capital will rise from INR 8.7 Cr to INR 420.1 Cr after the allocation. Tiger Global Management, Peak XV Partners, Prosus, Meta, and Think Investments are among the backers of the Bengaluru-based e-commerce giant.

Meesho’s IPO Preparations

By the end of 2025, the e-commerce giant is reportedly hoping to generate up to $1 billion through its first public offering (IPO). For its initial public offering (IPO), the startup has selected Morgan Stanley, Kotak Mahindra, and Citi as its bankers.

According to reports, the investors suggested valuing the public offering at $10 billion. In order to improve brand memory among its stakeholders prior to its eventual stock market offering, the business rebranded its parent corporation from Fashnear Technologies Private Limited to Meesho Private Limited last month.

 Similar actions have previously been taken by consumer services titan Swiggy, fintech unicorn Moneyview, and fast commerce startup Zepto. Meesho was first established in 2015 as a social commerce firm by Vidit Aatrey and Sanjeev Barnwal. In 2022, though, it switched to a marketplace model in order to compete with Amazon and Flipkart.

Meesho Focusing on Tier II, III and Beyond Cities

Meesho sells unbranded goods like clothes and cosmetics to consumers in tier II, tier III, and beyond, while Flipkart and Amazon are more well-known in tier I cities. These cities account for over 80% of the startup's income.

It's interesting to note that Meesho depends on advertising and marketing revenue from merchants rather than commission fees on its platform. So far, it has raised over $1.6 billion in capital, with investors including Trifecta Capital, Elevation Capital, and Mars Grow Capital.

Although the e-commerce platform has not yet released its FY25 figures, it was able to reduce its standalone net loss from INR 1,675 Cr in the previous fiscal year to INR 305 Cr in FY24, an 82% decrease.

From INR 5,734.5 Cr in FY23 to INR 7,615 Cr in the year under review, operating revenue increased by almost 33%. Flipkart, Meesho's competitor, is also preparing for a first public offering.

Joining the lengthy list of cutting-edge internet companies that have moved their headquarters to India or are in the process of doing so in order to list on the Indian bourses, the e-commerce behemoth said in April that it would reverse flip to India. Razorpay, Zepto, PhonePe, Groww, Pine Labs, and Eruditus are a few examples of these names.