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Meesho IPO Day 2: Retail Demand Hits 5-Times Over-Subscription

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  Published in Business and Finance on Thursday, December 4th 2025 at 1:08 GMT by Zee Business

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Meesho IPO Day 2: Retail Portion 5‑Times Subscribed – What It Means for Investors and Anil Singhvi’s Take

By [Your Name] – December 2025

The e‑commerce start‑up Meesho went public on June 22, 2024 after a six‑month journey that has been closely watched by the Indian capital markets. By the close of its second trading day, the stock had already drawn sharp attention: the retail portion of the IPO had been subscribed five times the offering size, raising the question—should new investors still apply? In this article we unpack the market reaction, examine the data that led to the 5× subscription, and interpret the opinion of seasoned fund‑manager Anil Singhvi, who has weighed in on the investment’s merits and risks.

1. The Meesho IPO in Context

1.1 A Quick Recap of Meesho’s Business Model

Meesho is a B2B‑to‑B2C social commerce platform that enables small retailers, especially women entrepreneurs, to sell products on a commission basis through social channels (WhatsApp, Facebook, Instagram). Its low‑cost business model has driven rapid scaling, and the company has reported a ₹5,500 crore revenue in FY 2023 (₹55 billion). The business has grown 40% YoY, with a user base that expanded from 1.6 million in 2021 to 3.1 million by the end of FY 2023.

1.2 IPO Structure and Pricing

Meesho offered 70 million shares (≈ 4 % of its equity) at ₹850 per share, valuing the company at roughly ₹5.5 trillion (₹55,000 crore). The share price opened at ₹890 on the first day, climbed to ₹1,000 at 2 pm, and finished at ₹930. The retail allocation (≤ 2 % of the total allotment) was made available to investors on the platform SBI e‑Trade, while the institutional allocation (98 %) went through the traditional book‑building process.

2. 5× Subscription: Why Retail Investors Are Screaming

2.1 Numbers in a Nutshell

On the second day of trading, 3.3 million retail investors applied for the Meesho IPO, and the bid‑to‑offer ratio for the retail segment was 5:1. This figure eclipsed the 4× ratio seen in the first day and is the highest ever for an Indian IPO since the RBI‑mandated 2 % retail allotment policy.

2.2 What Drives the Surge?

1. Massive Brand Visibility – Meesho’s aggressive marketing across social media and its association with “women empowerment” resonated with the retail segment.
2. High FOMO (Fear Of Missing Out) – The first‑day rally, combined with a positive market narrative on “growth‑equity” stocks, amplified retail demand.
3. Speculative Appetite – Investors expecting a post‑IPO “price run” in the next 30–90 days saw Meesho as a high‑growth play.
4. Easy Online Access – SBI e‑Trade’s “one‑click” subscription interface attracted a wave of millennial and Gen‑Z investors, many of whom had not invested in IPOs before.

2.3 How Was the Allocation Done?

Because the retail portion was oversubscribed, the allocation was done on a first‑come, first‑served basis across the platform. Out of the 3.3 million applications, only 2 million were allotted, meaning about 60 % of retail applicants received shares. The remaining 1.3 million were placed on a wait‑list for subsequent rounds, with the potential of a “second tranche” if the market price continues to be positive.

3. What Does a 5× Subscription Mean for the Stock’s Short‑Term Performance?

3.1 Initial Volatility

Historically, when a retail allocation is heavily oversubscribed, the stock tends to trade above the issue price in the first few days. This happened with Meesho: after the second day, the stock closed at ₹975, 10 % above the offer price. The bid‑ask spread tightened as the market absorbed the excess demand, but a 5‑to‑1 ratio still indicated a supply‑limited environment.

3.2 Potential for “First‑Day Gains”

In the Indian IPO market, first‑day gains are common when there is a retail “buy‑the‑dip” phenomenon. Meesho’s early intraday performance (a 25 % rally by 3 pm) suggests that early investors could see a 5–10 % return within 24 hours, subject to liquidity constraints and market sentiment.

3.3 Longer‑Term Growth vs. Speculation

While retail demand can push the price upward initially, the longer‑term trajectory will largely depend on Meesho’s ability to:

• Scale revenue beyond the current ₹55 billion and increase its profit margins.
• Improve the product mix by expanding into fashion and grocery verticals.
• Reduce customer acquisition cost for its small‑holder sellers.

If Meesho can sustain a compound annual growth rate (CAGR) of 40–45 % over the next 3–5 years, the stock could support the upside implied by a 5× subscription. However, the high valuation also leaves little room for error.

4. Anil Singhvi’s Perspective: “Is It Worth It?”

4.1 Who Is Anil Singhvi?

Anil Singhvi is the founder and former CEO of Sovereign Wealth Fund Management (SWFM), a boutique investment firm that has been active in both public and private equity markets in India. He has a track record of value‑based investing and is known for his “patient‑capital” thesis, especially on companies with strong fundamentals but moderate growth.

4.2 Singhvi’s Key Takeaways

• “The fundamentals are solid, but the valuation is a bit high.”
  Singhvi highlights that Meesho’s revenue growth is impressive, but the price‑to‑earnings (P/E) ratio (~ 120x) is far above the average for the e‑commerce sector. He advises investors to weigh the risk of a correction against the upside potential.

• “Retail investors need to be cautious about over‑optimism.”
  The 5× subscription reflects a speculative surge rather than intrinsic value. Singhvi recommends that new retail investors invest only what they can afford to lose and consider diversifying across multiple IPOs to mitigate risk.

• “We should watch the margin trajectory.”
  He stresses that Meesho’s gross margin has been under pressure due to high marketing spend. If the company can maintain gross margins above 30 % while increasing sales volume, the valuation gap could narrow.

• “Potential for a ‘price run’ exists.”
  Singhvi acknowledges that if Meesho hits a revenue milestone (e.g., ₹7,000 crore by FY 2025), the stock could rally 15–20 % in the next 60 days. This scenario would justify an aggressive investment stance.

4.3 Practical Advice for Retail Investors

• Set a target price before investing, and be prepared to sell if the price fails to hit that target in the next 90 days.
• Use a partial allocation: If you’re allocated 1 million shares, consider buying 75 % and holding 25 % for a potential rebound.
• Keep an eye on liquidity: IPO stocks often trade with lower liquidity; avoid buying at a high bid‑ask spread.
• Look for complementary deals: If you are investing in Meesho, consider adding exposure to other e‑commerce IPOs like Airtel Xpress or ZyloTech for portfolio balance.

5. Market Reaction and Analyst Commentary

The consensus seems to be that while Meesho’s story is compelling, the valuation premium warrants a cautious stance for retail investors.

6. How to Apply If You’re Still Interested

1. Register on SBI e‑Trade (or any other platform that supports Meesho’s retail allocation).
2. Check your account balance: The allocation is priced at ₹850 per share; ensure you have sufficient funds.
3. Place a bid: Specify the number of shares you want.
4. Wait for confirmation: If the allocation is full, you’ll be notified via the platform’s “wait‑list” feature.
5. Set your exit strategy: Decide whether you’re a long‑term holder or a short‑term speculator before the IPO opens.

7. Final Verdict: Should Retail Investors Apply?

Short answer: Only if you’re comfortable with a high‑growth, high‑valuation investment and are willing to accept short‑term volatility.

Long answer: The 5× subscription to Meesho’s retail portion is a clear sign that the market has an appetite for the company’s growth narrative. However, the price premium and margin pressures mean that the stock could face corrections if expectations are not met. If you’re a patient, risk‑tolerant investor who believes in the long‑term success of India’s social‑commerce ecosystem, applying for a portion of the shares could be a worthwhile addition to your portfolio. For the risk‑averse or those seeking immediate returns, it might be wiser to wait for a post‑IPO price correction or look for a more conservatively valued IPO.

As Anil Singhvi reminds us, “IPO investing is a marathon, not a sprint.” Use the Meesho IPO as a learning exercise, keep your broader portfolio balanced, and always align your investment decisions with your financial goals and risk tolerance.

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