Meesho, which was listed on December 10 after raising around Rs 5,421 crore, is currently boasting a market cap of Rs 97,600 crore, or close to $11 billion. At the upper end of the price band, the company was valued at around Rs 50,100 crore.
This means the company has added nearly Rs 47,000 crore in investors’ value after listing. This came mostly on the back of a strong debut at Rs 162, a premium of more than 46% to the issue price. The first day’s closing price was around Rs 170.
However, analysts warn that there is limited free-float available for trading, given the lock-in of big investors. This could mean that even small volumes of demand or supply shortage can lead to volatile price swings. The first set of lock-in shares will open on January 6 next year.
UBS earlier initiated coverage on the company with a ‘Buy’ rating and a target price of Rs 220, citing multiple long-term growth levers. The brokerage highlighted the company’s asset-light and negative working capital business model, which has helped it generate consistent positive cash flows, a key differentiator from many other internet-led companies.
UBS expects Meesho’s net merchandise value to grow at a compound annual rate of about 30% between FY25 and FY30, driven by a sharp rise in transacting users and higher order frequency. It also sees improving contribution margins and adjusted EBITDA margins as scale benefits kick in.
Among other large IPOs this year, Groww is up about 43% over its issue price, and LG Electronics India gained around 36% from its offer price, supported by the brand strength, though its stock has seen more muted movement in recent weeks.Hexaware Technologies, which raised Rs 8,750 crore earlier this year, is up just over 8% from its issue price, reflecting a more cautious investor view amid global tech spending concerns.
HDB Financial Services, despite a decent listing pop, is now up only about 3% from its offer price, as investors weigh valuation and growth prospects in the NBFC space. Lenskart Solutions is barely above water, with a gain of less than 1%, while Tata Capital is up just 0.2%.
Meesho’s outperformance reflects a growing value in India’s e-commerce space, especially as the company is focused on low average order values, high user engagement and tight control over costs.
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UBS noted that Meesho is likely to pass on logistics efficiencies to sellers and consumers, which could further lower average order values but expand the overall ecosystem and drive higher volumes.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)