Meesho pre-files DRHP with SEBI; aims to raise $500M in fresh issue

Softbank-backed Meesho has confidentially filed its DRHP (Draft Red Herring Prospectus) with market regulator SEBI as it aims to raise $500 million in fresh funds, two sources aware of the matter told YourStory.

The Bengaluru-based company will also have a secondary portion where some investors might divest their stake. According to primary discussions, Founders Vidit Aatrey and Sanjeev Barnwal aren't selling anything in the initial public offering, sources said.

The low-cost ecommerce startup has also reorganised its board amid its public debut plans, sources confirmed to YourStory. Sarthak Misra from SoftBank and Ashutosh Sharma from Prosus have stepped down from the company's board. Peak XV Partners' Mohit Bhatnagar and Elevation Capital's co-managing partner, Mukul Arora are expected to continue serving on the board.

Elevation Capital, Peak XV, and Prosus are among the largest institutional shareholders in Meesho, owning between 13 and 15% stake each. Japanese investor SoftBank owns close to a 10% stake in the e-tailer. Other investors in the company include WestBridge Capital and Fidelity.

Meesho declined to comment on the queries shared by YourStory.

Last week, Economic Times reported that the Prosus-backed startup had received shareholder approval after completing its domicile shift from the US to India.

Meesho has joined the growing list of startups opting for SEBI's confidential IPO route. Earlier this week, logistics player Shadowfax pre-filed its DRHP with the markets regulator, reportedly planning to raise Rs 2,000 crore—2,500 crore through an initial public offering,

Since the beginning of the year, Physicswallah, Groww, boAt, Aequs, and Shiprocket have filed their draft prospectus with the exchange regulator through the confidential route. The confidential route allows startups to manage risks, control the timeline of their IPO, and shield sensitive information from competitors before they are ready to list.

Ecommerce platform Meesho reported a 33% growth in revenue from its operations for the fiscal year 2023-24, reaching Rs 7,615 crore compared to Rs 5,735 crore in the previous year. During the same period, it narrowed its adjusted losses by 97% to Rs 53 crore in FY24 from Rs 1,569 crore in the previous fiscal. It attributed this improvement to organic growth and operational efficiencies, particularly in logistics, bolstered by its own logistics arm, Valmo Logistics, which was launched in February 2023.