Meesho IPO: e-commerce player to use part of fresh issue proceeds to 'pay salaries'

Meesho's draft IPO papers have revealed an unusual detail that has caught the eye of market watchers. The e-commerce firm plans to set aside ₹480 crore from its public issue specifically to pay the salaries of its AI, machine learning and core technology teams, a sum that stands out not just for its scale, but for being one of the largest single personnel-focused allocations seen in a recent tech listing.

The company has a little over 2,000 permanent employees, a number that makes the size of this planned outlay even more striking for potential investors. Meesho has placed this expense within a broader push to deepen its technology base.

Along with funding its people, the company intends to pump ₹1,390 crore into cloud capabilities via its subsidiary MTPL, and ₹1,020 crore into brand building and marketing.

Taken together, these investments form one of the most technology-heavy expenditure plans among upcoming consumer internet IPOs. Meesho appears to be betting that the next wave of Indian e-commerce growth will hinge on automation, data-driven operations and sharper personalisation.

The company has also outlined the limits of its inorganic-growth plans. It has stated that no more than 35% of the overall IPO proceeds will be used for acquisitions and general corporate purposes.

Of this, spending earmarked specifically for acquisitions and strategic bets will be capped at 10% of the total funds raised. The final break-up within these categories will be fixed once the offer price is determined and will be reflected in the prospectus filed with the Registrar of Companies.

Spend on general corporate purposes alone will not exceed 25% of the gross proceeds, according to the updated DRHP.

Meesho's first public offering, backed by SoftBank, opens on December 3. The issue size stands at ₹5,421 crore, including a fresh share sale worth ₹4,250 crore and an offer for sale of ₹1,171.2 crore by existing shareholders.

At the upper end of the price band, the company is expected to list with a market value of about ₹50,000 crore. Promoter ownership, currently at 19.08%, is set to decline to 16.76% post-listing.

The issue is being managed by Kotak Capital, JPMorgan, Morgan Stanley, Axis Capital and Citigroup.

Financially, Meesho continues to remain in the red. Its restated loss for FY25 stands at ₹3,941.70 crore, widening sharply from a FY24 PAT of ₹327.64 crore.

The swing is primarily due to a one-off impact that includes taxes related to a group reorganisation, accelerated ESOP vesting costs for promoters and associated perquisite taxes borne by the company.