Why SoftBank Is Refusing to Sell During the Meesho IPO, Meesho Targets $5.6 Billion Valuation
- Major investors SoftBank and Prosus are refusing to sell their shares and signaling strong long-term confidence in the business model.
- Meesho is launching a $606 million IPO with a valuation of $5.6 billion as the first major Indian e-commerce marketplace to go public.
India is witnessing a landmark moment in its digital economy as Meesho prepares to go public. The Bengaluru based company is set to become the country's first major horizontal e commerce platform to list on the stock exchange. This IPO aims to raise approximately $606 million and serves as a critical test for the maturity of the Indian online retail sector. The listing comes at a time when global tech investors are usually eager to exit. However the behavior of Meesho's largest backers suggests a different narrative is at play here.
SoftBank and Prosus have decided not to sell a single share in this offering. This decision sends a powerful signal of conviction to the broader market. These heavyweights usually look for liquidity events after holding assets for years. Their choice to stay invested indicates they believe the real growth for Meesho is still ahead. This stands in sharp contrast to the typical "pump and dump" fears that often plague tech IPOs. It effectively tells retail investors that the smart money is betting on a long term upside.
The pricing strategy appears disciplined and grounded in reality. The startup plans to price its shares between ₹105 and ₹111. This targets a valuation of roughly $5.6 billion. That figure represents a modest increase from its $5 billion private valuation in 2021. It suggests that the company is avoiding the trap of overpricing that hurt other Indian tech listings like Paytm in the past. The goal is to leave money on the table for new investors and ensure a stable aftermarket performance.
Meesho has carved out a unique position by ignoring the playbook written by Amazon and Flipkart. Those giants fight for the premium consumer in big cities who wants branded goods delivered instantly. Meesho focuses on the unbranded market and price sensitive shoppers in smaller towns. They have compared themselves to China's Pinduoduo or Brazil's Mercado Libre rather than Western models. This value first approach has allowed them to capture a massive user base that is coming online for the first time.
The financials present a mixed but promising picture of high growth and investment costs. Revenue for the six months ending September 2025 jumped to over $624 million. The platform also saw its gross merchandise value surge by 44 percent. However this aggressive expansion has come at a cost. The company reported a loss of about $48.4 million for the recent half year period. This is a significant widening compared to the previous year and reflects the fierce battle for market share.
Some early investors are taking the opportunity to realize partial gains. Elevation Capital and Peak XV Partners are selling small portions of their holdings. Y Combinator is selling a more significant 14 percent chunk of its stake. To balance the books the company founders are stepping up. Vidit Aatrey and Sanjeev Kumar increased the size of their own share sale to ensure there is enough liquidity in the market. This move helps compensate for the fact that the big institutional backers refused to sell.
This IPO is merely the opening act for a much larger drama in Indian commerce. Rivals are watching closely. Flipkart is expected to pursue its own listing next year. There are also reports that Amazon may spin off its Indian operations for a future IPO. Meesho is effectively the icebreaker. Its performance will set the benchmark for how public markets value the complex and cash hungry business of selling goods to a billion Indians