Meesho made a strong market debut at Rs 162, a premium of over 46%, and ended the first day near Rs 170. The upward momentum has continued, with the stock currently trading around Rs 235.
The steep rally, coupled with a low free-float of approximately 6%, has limited the availability of shares in the open market.
This led to a delivery shortfall, prompting the exchange to conduct an auction at Rs 258, significantly higher than the prevailing market price.
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IPOs with low free-float are increasingly witnessing such volatility, as seen last month with Groww, where a similar shortfall pushed 30 lakh shares into auction following an 89% surge in the stock. Groww’s free-float was also limited to around 7%, highlighting the risks of short-selling in such counters.
Since listing, Meesho has added over Rs 50,000 crore in investor wealth. The rally has been driven by strong demand and limited supply, with interest further bolstered after global brokerage UBS initiated coverage with a Buy rating and a target price of Rs 220.UBS cited Meesho’s asset-light model, negative working capital cycle, and consistent cash flow generation as key positives, setting it apart from many other internet-led peers.
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