Meesho Shares Rally 8%: Doubling from IPO Price in Just 7 Sessions
Meesho’s remarkable performance has positioned it as the standout IPO of 2025. Here’s a closer look at the driving forces behind this surge:
– Historic Surge: On December 18, Meesho’s shares climbed an impressive 8%, reaching a record high of ₹233. This marks a staggering 110% increase from its issue price of ₹111 in just seven sessions.
– Market Capitalization Milestone: With this surge, Meesho’s market capitalization has crossed the ₹1 lakh crore threshold, underscoring its rapid ascent in the stock market.
– Brokerage Support: In a timely boost, international brokerage firm UBS initiated coverage with a Buy rating and a target price of ₹220. This target was surpassed within a single trading day.
– Business Model Advantage: UBS points out that Meesho’s asset-light, negative working capital model fosters consistent positive cash flows, distinguishing it from many other internet-based businesses.
Strong Future Projections for Meesho
– Projected Growth: UBS forecasts a robust 30% compound annual growth rate (CAGR) in Net Merchandise Value (NMV) from FY25 to FY30, expecting contribution margins and adjusted EBITDA margins (as a percentage of NMV) to rise to 6.8% and 3.2%, respectively, by FY30.
– User Expansion: The brokerage anticipates a substantial increase in annual transacting users, growing from 199 million to 518 million. Concurrently, the annual ordering frequency is predicted to rise from 9.2 to 14.7, even as average order values dip from ₹274 to ₹233 due to the company’s efforts to pass on logistics efficiencies.
IPO Success and Market Dynamics
– Subscription Demand: Meesho’s three-day IPO, valued at over ₹5,000 crore, was met with robust demand, with an overall subscription of 79 times and the retail portion subscribed more than 19 times.
– Initial Debut: The stock made a stellar debut on December 10, listing at a premium to its issue price and closing its first day 53% higher than the IPO price.
– Steady Momentum: After a slight dip, the shares rebounded with more than a 3% gain before further extending their rally, even amidst broader market pressures.
As Meesho continues to climb, investors and market watchers are keenly analyzing how its innovative strategies and strong growth potential can sustain this momentum in the face of market fluctuations. With its shares doubling from the IPO price in such a short time, Meesho is clearly a rising star in the investment landscape.