Shares of the popular e-commerce platform Meesho experienced a notable decline on Wednesday, dropping by 5 per cent to reach Rs 173.20 on the Bombay Stock Exchange (BSE). This movement came immediately after the conclusion of a one-month lock-in period, which made a significant number of shares eligible for public trading.
Understanding the Lock-In Expiry Impact
The end of the lock-in period on Wednesday unlocked approximately 110 million shares for trading. This block represents about 2 per cent of Meesho's total equity. Market analysts often watch such events closely, as they can increase the supply of shares in the market, potentially exerting downward pressure on the stock price in the short term. However, it is crucial to note that shares becoming eligible for sale does not automatically translate to a mass sell-off by investors.
Despite this recent dip, it's important to view the stock's performance in a broader context. Meesho's share price is still trading a robust 56 per cent above its Initial Public Offering (IPO) price of Rs 111. The company made a stellar market debut on December 10, listing at Rs 162 and astonishing investors by closing its first day 53 per cent higher. The stock had previously reached a post-listing peak of Rs 254 before the recent correction.
Brokerages Maintain a Confident Outlook
In contrast to the day's price action, leading global financial institutions have reaffirmed their positive stance on Meesho's long-term trajectory. UBS, a prominent brokerage firm, has assigned a 'Buy' rating to the stock with a target price of Rs 220. Their analysis projects explosive growth in Meesho's user base, forecasting that annual users will surge from 199 million to 518 million. They do anticipate a slight decrease in the average order value (AOV) from Rs 274 to Rs 233, but this is seen as part of the platform's strategy to penetrate deeper into India's price-sensitive mass market.
This optimistic view is shared by Choice Institutional Equities, which has set a target price of Rs 200. In their assessment, Meesho is uniquely positioned to capitalize on the evolving Indian e-commerce landscape. They highlighted the platform's zero-commission model, low average order value focus, and discovery-led approach that resonates with users in Tier-2 and Tier-3 cities. The brokerage pointed to Meesho's strengths in long-tail product depth, content-driven demand generation, and integrated logistics as key drivers of superior unit economics.
Market Watchers Weigh the Opportunity
The central question for investors now is whether Wednesday's decline is merely a temporary reaction to the increased share availability or a strategic buying window ahead of the company's next growth chapter. The consensus among analysts suggests that the fundamental story for Meesho remains intact. The platform is viewed as a primary beneficiary of the next wave of 100 to 150 million mass-market internet users in India, with significant monetization potential through advertising, fintech services, and fulfilment solutions.
While short-term volatility following lock-in expiries is common, the sustained confidence from major brokerages indicates a belief in Meesho's business model and its execution capabilities. The focus remains on the company's ability to scale its user base profitably and leverage its ecosystem to drive future revenue streams.
