Bengaluru-based ecommerce platform Meesho has transitioned from a private limited company to a public limited company, as confirmed by filings with the Registrar of Companies (RoC).

This is a key step toward a potential IPO.

Meesho is also seeking approval from the National Company Law Tribunal (NCLT) to shift its domicile from the US to India.

Once approved, the new entity, Meesho Ltd, will serve as the parent company for its ecommerce operations.

The formal IPO process hasn’t started yet, but Meesho has shown intent to meet regulatory requirements for a future listing in India.

It has appointed Kotak Mahindra Capital, Citi, JP Morgan, and Morgan Stanley as merchant bankers.

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🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ India’s reverse flipping trend signals maturing startup ecosystem

Meesho’s process of redomiciling from the US to India before its IPO reflects a significant shift in India’s tech landscape.

This “reverse flipping” phenomenon is becoming increasingly common, with companies like KreditBee, Eruditus, and Udaan reportedly planning similar moves to capitalize on India’s booming IPO market 1.

The trend reverses the historical pattern where Indian startups would incorporate in the US or Singapore to attract foreign investment, showing how India’s capital markets have matured significantly.

India’s record-breaking IPO activity in 2024, with 327 companies raising $19.9 billion, has created favorable conditions for domestic listings, making it the world’s hottest IPO market that year 2.

Two-thirds of this capital funding now comes from domestic sources, dramatically reducing dependence on foreign investors and creating a self-sustaining ecosystem for Indian tech companies 3.

2️⃣ Social commerce emerges as India’s unique e-commerce innovation

Meesho’s growth represents the rise of social commerce in India, which now accounts for 15% of the country’s $120 billion e-commerce market, up from just 5% in 2020 4.

The platform’s focus on enabling individuals to sell through social networks like WhatsApp and Facebook taps into India’s strong community ties and trust-based purchasing behaviors.

With 187 million unique annual transacting users, Meesho has found particular success with women entrepreneurs—over 50% of its users are women who can start businesses with zero initial investment 5.

This social commerce model is adapted to Indian market conditions, where the average person spends 2.5-3 hours daily on social media and values personal recommendations when making purchases 4.

The platform processes approximately five million daily orders, highlighting the scalability of social commerce in reaching consumers in smaller cities and towns across India 6.

3️⃣ The order volume versus value paradox in Indian e-commerce

Meesho’s market position reveals an interesting dynamic: it commands 37% market share in terms of order numbers but only 8.5% in terms of gross merchandise value (GMV) 7.

This gap highlights Meesho’s focus on high-volume, low-value transactions—a strategy that has helped it reach more users but presents potential profitability challenges as it approaches public markets.

The platform’s business model charges significantly less than competitors, taking only 20% of a purchase’s value compared to 34-40% on other platforms, allowing it to attract price-sensitive consumers and sellers 6.

This approach has proven effective in penetrating India’s tier 2 and tier 3 cities, where price sensitivity is high and consumers are often making their first e-commerce purchases.

Meesho’s projected 26% CAGR over the next six years suggests investors believe this high-volume strategy will eventually translate to substantial value as India’s e-commerce market, currently at $120 billion, continues to expand 4.

Recent Meesho developments

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