Meesho Share Price: Heavy selling was seen in the shares of e-commerce company Meesho on Monday, December 22. After the sharp rally at the beginning of the month, investors started booking profits, due to which the stock remained under pressure for the second consecutive session.
On Friday, Meesho shares had reached a record high of Rs 254.65, but soon after this selling took over. The stock fell 10 percent to Rs 202.05 in Monday’s trade and hit the lower circuit. Overall, the stock has fallen by more than 14 percent in the last two sessions.
Great rally after IPO, now phase of correction
Meesho’s IPO was listed in the stock market on 10 December. Its issue price was Rs 111. This stock had a strong start with a premium of 46 percent. After this the pace continued steadily. At one time it reached about 53 percent above the offer price.
After the recent fall, Meesho has definitely lost the multibagger tag it had achieved last week, but despite this the stock is still trading about 82 percent above its IPO price. That means there is still huge profit to be made for early investors.
The previous rise came from UBS’s buy call.
Last week, there was a sharp rise of about 35 percent in the shares of Meesho. The main reason for this was the positive report of global brokerage firm UBS. UBS had given a Buy rating on the stock considering the company’s strong business model, rapidly growing user base and improving financial metrics.
UBS has kept a target price of Rs 220 for Meesho. The brokerage believes that the company’s negative working capital and asset-light model puts it in a strong position for sustainable profitability in the long run. According to the report, the company’s NMV CAGR may be around 30 percent by FY30. This will be supported by increasing user engagement and order frequency.
Is there a buying opportunity in the dip?
According to Harshal Dasani, Business Head, INVAsset PMS, the current decline is not just a matter of valuation, but investors are now examining the quality of growth more closely. He says that even though GMV growth looks strong, the figures related to profitability are not completely clear yet.
Dasani warned that entering a stock merely on the basis of falling price may not be the right strategy. According to him, in the more selective market environment after 2025, investors are now giving more importance to cash-flow breakeven and not just topline growth.
Experts’ caution regarding valuation
Bonanza Research Analyst Abhinav Tiwari had also earlier said that Meesho is certainly a strong long-term business, but the near-term risk-reward does not look attractive at the current valuation. That means the long term story may be good, but there may be ups and downs in the short term.
IPO got tremendous response
Meesho’s Rs 5,421 crore IPO was very popular among investors. This issue was subscribed a total of 79.02 times. The price band of the IPO was between Rs 105 and Rs 111, which included a fresh issue of Rs 4,250 crore and an offer-for-sale (OFS) of Rs 1,171 crore.
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