Meesho currently has about 6% free-float, which basically means, only this percentage of shares are actually available for trading because IPOs usually have a lock-in period, where big investors cannot offload shares for a brief period.
Reports indicate the auction price was higher, at Rs 258, than the current market price, which was at around Rs 235.
Shares of the e-commerce platform have surged about 110% from the issue price of Rs 111 in just seven trading sessions, extending a rally that has been fuelled by strong interest and limited supply. With the latest jump, Meesho has added over Rs 50,000 crore in investor wealth since listing.
The sharp rise appears to have trapped traders who had taken short positions, expecting a pullback after the stock’s strong debut. As prices kept rising and shares remained scarce, many were unable to deliver stock on settlement day, forcing the exchange to move the shortfall into the auction market.
Meesho’s rally began with a strong debut at Rs 162, a premium of over 46% to the issue price, followed by a first-day close near Rs 170. The momentum has continued despite broader market volatility.
The stock has also drawn attention after global brokerage UBS initiated coverage with a Buy rating and a target price of Rs 220, citing the company’s asset-light, negative working capital model that allows it to generate consistent cash flows, unlike many internet-led peers.
Also read: Rs 47,000 crore gain! Meesho’s 95% rally makes it India’s best-performing big IPO of 2025
The auction episode echoes what markets saw last month in Groww, another high-profile IPO that delivered sharp post-listing gains. Groww‘s stock had surged nearly 89% over its IPO price within days, leading to 30 lakh shares entering the auction mechanism after short sellers failed to deliver. At the time, analysts highlighted Groww’s extremely low free float of around 7%, which made short-selling particularly risky.
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