RPS Ventures sells Meesho stake for Rs 900

RPS Ventures sold a 0.9% stake in e-commerce marketplace Meesho for Rs 899.7 crore on Wednesday. The fund offloaded 38.6 million shares at Rs 233 each through multiple block deals, according to BSE data.

Major investors including Norges Bank, Fidelity, Goldman Sachs, Morgan Stanley, and Citigroup were among the buyers. Following the trades, Meesho's stock closed 1.6% lower at Rs 236.35 on the BSE.

This transaction reduces RPS Ventures' holding in Meesho. As of June 30, the fund held a 1.2% stake. RPS Ventures, established by former SoftBank Vision Fund managing partner Kabir Misra, first invested in Meesho in 2018. That initial $50 million funding round valued the company between $200 million and $250 million.

Investor exits continue

The sale by RPS Ventures continues a trend of early investors reducing their positions. In August, Peak XV Partners and Elevation Capital offloaded a combined 2.3% stake in Meesho. Those block deals were worth approximately Rs 1,900 crore.

These moves reflect shifting dynamics among the company's early backers as the firm matures.

UBS raises price target on improved outlook

Brokerage firm UBS has updated its view on Meesho. In a September 22 research note, it raised its price target for the stock to Rs 260 from Rs 210, maintaining a Buy rating. The analysts cited higher growth expectations and improving margins.

UBS increased its financial estimates for Meesho significantly. The brokerage raised its net merchandise value (NMV) forecasts for fiscal years 2029 through 2031 by 7% to 18%. Its Ebitda estimates for the same period were lifted by 20% to 40%.

The firm expects Meesho's growing seller base, buyer count, and product selection to support this growth.

Path to profitability strengthens

UBS outlined specific drivers for margin expansion. It expects Meesho's logistics costs to decline, allowing the company to rebuild its logistics margin to 2.5% over the next two to three quarters. Advertising revenue is another key factor. This revenue stream crossed 3% of sales in the first quarter of FY27.

As a result, UBS forecasts Meesho's contribution margin will rise from 4.6% in Q1 FY27 to about 5% by the end of the fiscal year.

Recent quarterly results support this improving trajectory. For the April-June quarter, Meesho narrowed its loss significantly. The company reported a loss of Rs 133 crore for Q1 FY27, compared to a loss of Rs 289 crore in the same quarter the previous year.

This improvement was driven by a sharp rise in marketplace revenue and better operating metrics. Higher user engagement, improved delivery conversion, and stronger platform monetisation were contributing factors. The company's net merchandise value for the June quarter grew 34% year-on-year to Rs 11,614 crore.