Meesho Shares Tumble After Strong Market Debut

Meesho, a prominent e-commerce platform in India, has witnessed a significant dip in its share prices shortly after a stellar debut on the stock market. Following an impressive initial surge of 65% in its first few sessions, the stock has plunged 23% in just three trading days. This sharp decline has raised concerns among investors and market analysts alike.

On December 23, the shares hit a low of Rs 185.34 before recovering slightly, closing at Rs 187.75 on the BSE and Rs 187.25 on the NSE. The substantial drop dragged Meesho’s market capitalisation below the Rs 85,000 crore mark, sparking fears about the company’s future performance. Trading data revealed that around 4.9 million shares changed hands in block deals at a discount of 3-10% to the previous closing price, indicating a sell-off among investors.

Meesho made its market debut on December 10, initially listing at Rs 162.50 on the NSE, which was a premium of 46.40% over its issue price of Rs 111 per share. The company successfully raised Rs 5,421.20 crore from its initial public offering (IPO), with Rs 4,250 crore coming from new shares and Rs 1,171 crore from existing shareholders selling their stock.

The funds raised are expected to be utilized to expand Meesho Technologies, which includes investments in cloud infrastructure and marketing initiatives. Despite the recent downturn, analysts have expressed optimism about Meesho’s growth trajectory. A report from Choice International forecasts a 31% revenue compound annual growth rate (CAGR) from FY25 to FY28, indicating a strong potential for recovery.

Meesho’s IPO was met with overwhelming interest, being subscribed over 79 times, particularly by institutional investors who bought 120 times the portion allotted to them. In FY25, Meesho’s revenue grew to nearly Rs 9,390 crore, up from Rs 7,615 crore the previous year, while losses narrowed significantly from Rs 3,942 crore to Rs 289 crore.

As the e-commerce landscape continues to evolve in India, the future of Meesho will depend on how effectively it can leverage the funds raised and navigate the current market challenges.