As many as 110 million shares of Meesho, or 2% of its outstanding equity, became eligible for trading on Wednesday following the end of the lock-in period, according to Nuvama Alternative & Quantitative Research. Market participants should note that the expiry of a lock-in does not imply immediate selling, only that the shares can now be traded in the open market.
Meesho shares are still up about 56% from their issue price of Rs 111, though they have retreated nearly 32% from a post-listing high of Rs 254.
The company made its stock market debut on December 10, listing at a premium to its issue price and closing 53% higher on the first day of trade. The stock debuted at Rs 162, a 46% premium to the IPO price, and ended its first session near Rs 170. The three-day, Rs 5,000-crore-plus offering was subscribed 79 times overall, with retail investors alone bidding 19 times the shares on offer.
Brokerage view remains constructive on Meesho
Global brokerage UBS had initiated coverage on Meesho with a ‘Buy’ rating and a target price of Rs 220, citing the company’s asset-light model, negative working capital cycle and consistent cash flow generation. UBS expects Net Merchandise Value to grow at a 30% compound annual rate over FY25–30E, driven by an expansion in annual transacting users from 199 million to 518 million and higher ordering frequency, even as average order values moderate from Rs 274 to Rs 233.
Choice Institutional Equities had also struck an optimistic note, saying that “Meesho is best placed to monetise this shift via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users. Long-tail depth, content-led demand and logistics integration enable superior unit economics, with rising ad/fintech/fulfilment monetisation makes Meesho the most leveraged play on the next 100–150Mn mass-market users.” The brokerage set a target price of Rs 200, implying an 80% upside from the IPO price.
With a fresh supply overhang now technically in play, investors are weighing whether Wednesday’s pullback marks a pause driven by lock-in dynamics, or an entry point ahead of the company’s next phase of growth.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)