Meesho, the e-commerce platform, has seen its stock price fall by 8% over two trading sessions, slipping to Rs 216.75 on Monday. This comes after a dramatic post-listing rally that more than doubled the stock’s IPO price in just over a week.
Initial Public Offering (IPO) Performance
Meesho made a striking market debut, listing at Rs 162, a 46% premium over its Rs 111 IPO price, and closing its first session near Rs 170. The three-day IPO, sized at over Rs 5,000 crore, attracted overwhelming demand, being subscribed 79 times overall, with retail investors alone contributing to a 19-fold subscription.
Recent Price Movement
In the last seven trading sessions, the stock surged nearly 110% over its issue price. This sharp rally triggered a short squeeze, forcing more than one crore shares into the exchange auction mechanism after several short sellers failed to deliver stock for settlement. Meesho’s free-float of roughly 6% has magnified price swings.
Brokerage Views
Global brokerage UBS initiated coverage on Meesho with a 'Buy' rating and a target price of Rs 220. UBS highlighted the company’s asset-light model, negative working capital cycle, and consistent cash flow generation as key positives.
- Predicts a robust 30% compound annual growth in Net Merchandise Value (NMV) over FY25–30E
- Driven by a sharp expansion in annual transacting users—from 199 million to 518 million
- An increase in ordering frequency, even as average order values moderate from Rs 274 to Rs 233
Choice Institutional Equities also endorsed the stock, stating that Meesho is best placed to monetise the shift in the market via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users.
Long-term Growth Narrative
While the recent pullback has tempered some investor enthusiasm, experts say the long-term growth narrative remains intact, supported by strong demand, high engagement among Tier-2 and Tier-3 users, and positive analyst coverage.
Remember, this is a perspective, not a prediction. Do your own research before making any investment decisions.