IPO verdict: Meesho has levers, Aequs has margins, Vidya Wires needs time, says Sunny Agrawal – News Air Insight

A blockbuster listing from Meesho and solid market debuts by Aequs and Vidya Wires have kept IPO sentiment buoyant, but investors must remain selective, says Sunny Agrawal, Head of Fundamental Equity Research at SBI Cap Securities. Speaking to ET Now, Agrawal shared his views on valuations, long-term prospects and whether investors should hold or book profits after debut-day gains.

Meesho listing at 45% premium: Valuation rich but levers intact

Agrawal described Meesho’s 45% premium listing as “fabulous”, placing its post-listing valuation at around ₹75,000 crore. “At the upper band, Meesho was priced at 5.3x price-to-sales. After listing gains, it now trades at 7–8x price-to-sales, broadly in line with other new-age tech peers,” he said.

Despite the steep valuation, Agrawal believes Meesho has multiple levers to drive profitability:

Zero commissions: The platform currently charges no commission to sellers. With 250 crore annual transactions, even a ₹1–2 fee per order could add ₹250–500 crore directly to EBITDA.

Ad revenue upside: Meesho’s advertising revenue as a share of GMV is only 2–2.5%, far below the 5–10% global benchmark.

“These levers give Meesho a clear path to deliver profitable growth,” he said. For fresh buyers, he suggests taking a small tracking position and evaluating the company’s execution over the next 2–3 quarters.

Aequs: Niche aerospace play with strong margins

Aequs, which listed with a 12.5% premium, operates in a high-margin aerospace precision engineering segment. “This is a very niche business. Generating 25% EBITDA margins in a sector where large OEMs typically squeeze suppliers speaks volumes about the product’s criticality,” Agrawal said.While its consumer division remains loss-making due to low utilisation, Agrawal believes profitability will improve as scale builds. “For investors seeking listing gains, profit booking is fine. But long-term investors can hold Aequs for 3–5 years, as the aerospace order cycle is naturally long and earnings visibility strong.”

Vidya Wires: Commodity business, low margins — profit-book and wait

On Vidya Wires, Agrawal was more cautious. “This is a commodity-driven winding wire business with low margins and volume-led growth,” he said. For those who gained on listing day, booking profits is advisable.

He recommends tracking the company for 2–3 quarters before considering a long-term position. “Wait for earnings clarity and hear the management’s growth roadmap. It’s best to adopt a wait-and-watch approach for now.”

Bottom line

Meesho: Great debut; take a tracking position and watch execution.
Aequs: High-margin niche business; hold for 3–5 years for long-term compounding.
Vidya Wires: Book profits now; reassess after early earnings performance.