Meesho's Market Value Surges 37%: Why This E-commerce Giant Might Keep Growing (Investor's Insight)

Imagine an e-commerce marketplace that's grown exponentially in just a week. Meesho, an Indian online shopping platform, has achieved a remarkable milestone - its market capitalisation has crossed the ₹1 lakh crore mark within seven sessions of its listing. This surge in market value has left investors and analysts intrigued, and for good reason.

What's Behind Meesho's Success?

Meesho's shares ended 8.2% higher at ₹234 on Thursday, following a 20% rally the previous day. The company's market capitalisation has increased by 37% since its listing on December 10, from ₹76,926 crore to ₹1,05,607 crore. This significant growth can be attributed to the company's focus on lower and middle-income consumers in India's Tier 2 and 3 cities, where online adoption is accelerating rapidly.

Key Factors Driving Growth

A recent report by UBS highlights Meesho's asset-light, negative working capital business model as a major factor contributing to its success. This model has ensured positive cash flows, setting Meesho apart from other internet businesses. The report also initiates coverage on Meesho with a 'Buy' rating and a 12-month price target of ₹220 per share.

Growth Runway and Future Prospects

Meesho's growth potential is significant, driven by its focus on online adoption in Tier 2 and 3 cities. As more consumers in these areas transition to online shopping, Meesho is well-positioned to capitalize on this trend. With its strong business model and increasing market value, Meesho might continue to attract investors and analysts alike.

Remember, this is just a perspective, not a prediction. It's essential to do your own research and consider multiple factors before making any investment decisions.