Meesho readies Rs 1,020 crore marketing war chest from IPO

New Delhi: Meesho, which got the SEBI nod for IPO, will deploy Rs 1,020 crore from the fresh issue for marketing and brand building over FY27 and FY28, according to its UDRHP. 

The company said the outlay will back brand campaigns and performance marketing run through its subsidiary.

The proposed IPO includes a fresh issue of up to Rs 4,250 crore and an offer for sale of 17.57 crore equity shares by existing investors, including Elevation, Peak XV, Venture Highway and Y Combinator. 

Net proceeds are earmarked for cloud infrastructure in Meesho Technologies Private Limited, salaries for machine learning, AI and technology teams, marketing and brand initiatives, inorganic growth, and general corporate purposes.

Advertising and sales-promotion expenses were Rs 927.80 crore in FY23, Rs 459.46 crore in FY24 and Rs 643.53 crore in FY25. For the three months ended June 30, 2025, the outlay was Rs 238.999 crore. 

As a share of marketplace NMV, ad and promo fell from 4.82% in FY23 to 2.15% in FY25. As a share of total expenses, it declined from 12.26% to 6.43% over the same period. In Q1 FY26, the ratios stood at 2.75% of NMV and 8.60% of total expenses.

Meesho’s media mix has pivoted decisively to digital. Digital formed 61.5% of total ad and promo in FY23, 76.4% in FY24 and 85.2% in FY25; in Q1 FY26 it was 95.3%. Non-digital television, print and events accounted for 14.8% in FY25 and 4.7% in Q1 FY26. 

On absolute spends, digital marketing and advertising was Rs 570.2 crore in FY23, Rs 351.0 crore in FY24 and Rs 548.1 crore in FY25, with Rs 227.7 crore in Q1 FY26. 

Within digital, performance marketing was Rs 446.1 crore in FY23, Rs 243.1 crore in FY24, Rs 207.1 crore in FY25 and Rs 86.6 crore in Q1 FY26. 

Influencer marketing and content commerce rose from Rs 4.5 crore in FY23 to Rs 11.4 crore in FY24 and Rs 57.8 crore in FY25, and was Rs 14.6 crore in Q1 FY26.

Seller-side advertising is positioned as a key revenue lever. The filing describes pay-for-performance ads and content commerce sold to sellers, supported by tools that recommend catalogues to promote, optimise cost-per-click bids, set budgets and track performance through simplified dashboards. 

Sellers can also access content creators for discovery. Meesho reported return on ad spend of 8.62x in FY25 and 18.28x in Q1 FY26. The company said improvements to ranking quality, personalisation and conversion should lift ad revenue as active sellers and SKU depth rise.

On demand, Annual Transacting Users rose from 136.40 million in FY23 to 198.77 million in FY25. Placed orders increased from 1.02 billion to 1.83 billion. Management says the spend to convert a new consumer declined at a 26.86% CAGR between FY23 and FY25, supported by tighter payback windows, cohort-level CAC tracking and a higher share of organic and direct traffic.

The UDRHP outlines three priorities for marketing effectiveness: efficient acquisition with stricter payback thresholds; brand salience at scale through large digital properties, creator programmes and vernacular creatives for Tier 2 to Tier 4 households; and seller education with category storytelling to improve repeat categories and private labels. 

Seasonality around festive quarters and category events is flagged as a planning factor. Meesho has a master services agreement for brand marketing that runs to August 2026 and has committed Rs 250 crore over three years with an existing agency partner.

Risks noted include sensitivity of seller ad uptake to algorithm changes, seller budget cycles and softer demand, and variability in marketing efficiency with media pricing and platform policy shifts. Expansion in under-penetrated shopper segments will require sustained investment, alongside continued work on platform safety, risk controls and post-purchase reliability.