Meesho’s shares
Shares of online shopping app Meesho are witnessing a spectacular rise. Within 7 days of trading session, the price of the company’s shares has doubled from the IPO. Meesho shares rose 8% to reach a record high of Rs 233 on December 18. Due to this, the sharp rise of the stock continued after listing. With this surge, Meesho’s shares have gone up by almost 110% from its issue price of Rs 111 in just 7 trading sessions. After this day’s rise, the total market cap of the company has crossed Rs 1 lakh crore. It has doubled from its issue price.
In the last session, international brokerage firm UBS had given a buy rating on this stock and given a target price of Rs 220, which the stock has already crossed. UBS says the company’s asset-light and negative working capital model helps it generate consistent positive cash flow, which is different from many other internet companies.
company status
The brokerage estimates that there will be a strong growth of about 30% annually in the net merchandise value (NMV) of the company between FY25 to FY30. Also, by FY30, contribution margin may improve to 6.8% and adjusted EBITDA margin may improve to 3.2%. According to UBS, this growth will come from the number of annual active customers increasing from 199 million to 518 million and the average number of orders increasing from 9.2 to 14.7. However, the average order value may come down from Rs 274 to Rs 233, as the company is passing the benefits of better efficiency in logistics to customers through a larger platform.
Meesho had entered the stock market on 10 December. It was listed at a premium to its issue price and closed 53% above the IPO price of Rs 111 on the very first day. After two days of slight decline, the stock rose by more than 3% on Monday and this rise continued on Tuesday even as the entire market remained under pressure.
Subscription details
Meesho’s IPO received an overwhelming response from institutional and retail investors. Its size was more than Rs 5,000 crore. This issue was subscribed a total of 79 times, while the share of retail investors was filled more than 19 times.
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