Meesho, backed by SoftBank, has received approval from its shareholders for a proposal to issue bonus shares amounting to 411.4 crore. This comes before the e-commerce giant submits its draft red herring prospectus (DRHP) to the SEBI regulator.

According to the MCA filings of the company accessed by Inc42, the members approved during an extraordinary general meeting on May 31 the proposal to issue bonus shares of INR 1 each to equity shareholders at a ratio of 47:1.

“the consent of the members is hereby granted to the company’s board of directors for the purpose of issuing 411.4 Cr bonus equity shares of INR 1 each, credited as fully paid-up shares to holders of the company’s existing equity shares,” the company stated in a regulatory filing.

The filing showed that the company’s paid-up share capital will increase to INR 420.1 Cr from its previous amount of INR 8.7 Cr following the allotment.

The e-commerce giant based in Bengaluru counts notable investors such as Tiger Global Management, Peak XV Partners, Prosus, Meta, and Think Investments among its supporters.

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It is reported that the ecommerce giant aims to generate close to $1 billion via its initial public offering (IPO) by the end of 2025. The startup has chosen Morgan Stanley, Kotak Mahindra, and Citi as its bankers for the IPO. It has been reported that the bankers have put forth a valuation of $10 billion for the public issue.

To improve brand recall among its stakeholders before its eventual stock market listing, the company renamed its parent entity from Fashnear Technologies Private Limited to Meesho Private Limited last month.  In the past, fintech unicorn Moneyview, quick commerce unicorn Zepto, and consumer services giant Swiggy made a similar move.

Meesho, which was established in 2015 by Vidit Aatrey and Sanjeev Barnwal, began as a social commerce startup.  It changed to a marketplace model in 2022, however, in order to compete with giants such as Flipkart and Amazon.

Meesho aims at customers in tier II, III, and lower cities with unbranded items such as clothing and cosmetics, while Flipkart and Amazon are more well-known in tier I cities.  Over 80% of the startup’s revenue comes from these cities.

Interestingly, Meesho does not impose commission fees on its platform; rather, it depends on revenue from seller advertising and marketing.

To date, it has raised over $1.6 billion in funding and counts investors such as Mars Grow Capital, Elevation Capital, and Trifecta Capital.

The e-commerce platform has not yet revealed its FY25 figures, but it successfully reduced its standalone net loss in FY24 to INR 305 Cr from INR 1,675 Cr in the prior fiscal year, achieving an 82% decrease.

During the year under review, operating revenue surged by almost 33%, reaching INR 7,615 Cr compared to INR 5,734.5 Cr in FY23.

Flipkart, a competitor of Meesho, is also preparing for its IPO.  The ecommerce giant confirmed its plans in April to reverse flip to India, joining the long list of new-age tech firms that have relocated their headquarters to India or are in the process of doing so as they seek to list on the Indian bourses.  This includes names like Razorpay, Zepto, PhonePe, Groww, Pine Labs, Eruditus, and others.