(Dec 10): Meesho Ltd, an Indian e-commerce platform, surged in its debut in Mumbai on Wednesday (Dec 10), showing growing investor appetite for tech startups after a string of blockbuster listings.
Shares of the SoftBank Group Corp–backed company jumped 54% in Mumbai following its US$603 million initial public offering. This marks one of the strongest performances among Indian IPOs that have raised at least US$500 million this year. The stock is trading at 172 rupees, giving the company a market valuation of 758 billion rupees.
Meesho’s debut comes amid a rush by Indian companies to raise funds in the primary market, making India the fourth-biggest IPO venue in the world this year. The deals have surpassed last year’s peak and the demand is particularly intense for tech startups, a segment investors see as critical to India’s growth.
Online marketplace Urban Co and Billionbrains Garage Ventures Ltd, the parent of India’s top discount broker Groww, had also surged on their listing. Eyewear retailer Lenskart Solutions Ltd, however, had a volatile opening, triggering a debate about lofty valuations.
About half of the 333 firms listed so far this year are trading below their offer price, according to data compiled by Bloomberg. Meesho’s strong debut may help ease any concerns about India’s hot IPO market.
See also: Temasek, top funds bid in Swiggy’s US$1.1 bil share sale — Bloomberg
Meesho runs a marketplace which connects small manufacturers with value-conscious consumers across India’s smaller cities. Its IPO was subscribed more than 79 times despite a dramatic anchor allocation round that saw several major funds walk away, Bloomberg News reported earlier this month.
The company, which became an India e-commerce heavyweight by selling Temu-like low-priced offerings, plans to deploy some of the proceeds to penetrate smaller towns in one of the world’s biggest consumer markets. It has drawn customers by selling trendy clothes with dresses priced as low as US$4.
The Bengaluru-headquartered firm reported a loss of 39.4 billion rupees on revenue of about 94 billion rupees for the year ended March. Investors have largely shrugged off losses at listing-bound startups in recent years, focusing on their growth potential.
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