Morgan Stanley and Two Other Bankers are Chosen by Meesho as IPO Plans are Fully Underway

E-commerce giant Meesho is reportedly stepping up its efforts to go public later this year and intends to raise $1 billion through an initial public offering (IPO). According to a media report, the company has already selected Morgan Stanley, Kotak Mahindra Capital, and Citi as advisers for its initial public offering (IPO). Although Meesho wants to fund $1 billion, bankers have offered a $10 billion valuation. According to the media source, if negotiations are successful, even JP Morgan is probably going to be included in the IPO syndicate. Meesho will file its draft filings during the next few weeks, according to a number of media reports.

Recent Financial Developments of Meesho

Nearly two months have passed since the online shopping giant raised an additional $250 million to $270 million from investors Tiger Global, Think Investments, and Mars Growth Capital, bringing the total amount of its investment round to roughly $550 million. As per the media reports, the deal would have valued Meesho at roughly $3.9–4 billion, a 20% drop from its previous estimate of $4.9 billion. Meesho's backer Prosus first disclosed that Meesho is one of the possible companies to be listed on the bourses in 18 months in its investor presentation of H1 FY25 in December of last year. According to reports, the business has also applied to the National Company Law Tribunal (NCLT) in Bengaluru to move its headquarters to its Indian subsidiary, Fashnear Technologies. This will pave the way for its future intentions to go public on the stock exchanges.

Meesho to Migrate from US to India

Before moving forward with the IPO proposal, Meesho must first relocate its headquarters from Delaware, in the United States, to India. The procedure is well underway, and Meesho is expected to pay about $300 million in taxes related to the reverse merger. As businesses develop ambitious growth plans that will reward new investors, Meesho will then join a list of expanding Indian startups like PhysicsWallah (PW), Ather, and Lenskart that are vying for a valuation that is much higher than what they were able to secure during their private market fundraises. In order to leave some value for potential new investors, both retail and institutional, some new-age companies, like Ola Electric, MobiKwik, and Firstcry, went public at a valuation lower than what they had originally determined or at a discount when compared to their most recent private market fundraising.

Even though Meesho entered the e-commerce market late in 2015, it has expanded in size and scope and enhanced its profitability profile in spite of facing off against well-funded competitors like Amazon and Walmart's Flipkart. Although Flipkart leads the Indian e-commerce business, Meesho has become well-known and significantly increased its market share over time by concentrating on Tier 3 and beyond locations or consumers who are cost-conscious. Revenues for the company rose from INR 3,240 crore in FY22 to INR 5,735 crore in FY23 and then to INR 7,615 crore in FY24. In FY24, the net loss decreased from INR 3,248 crore in FY22 to INR 305 crore.