Newly listed ecommerce firm Meesho sees early trade dip as 109.9 million shares become eligible for trading
Shares of newly listed ecommerce firm Meesho declined by as much as 5 per cent in early trade on Wednesday, January 7, tracking the expiry of the company’s one-month shareholder lock-in period.
Data from Nuvama Alternative and Quantitative Research showed that nearly 109.9 million shares, representing around 2 per cent of Meesho’s outstanding equity, became eligible for trading following the lock-in expiration.
Based on the stock’s closing price on Tuesday, the unlocked shares are valued at approximately Rs 1,997 crore.
Market participants note that the end of the lock-in period does not automatically translate into selling pressure, as it merely allows shareholders the option to trade their holdings in the open market.
Despite recent volatility, Meesho’s stock continues to trade well above its issue price. The shares have gained nearly 64 per cent from the IPO price of Rs 111, although they have corrected about 28 per cent from the post-listing peak of Rs 254.
The SoftBank-backed ecommerce platform made its market debut on December 10, listing at a premium to the issue price and closing its first trading session 53 per cent higher.
Meesho’s three-day initial public offering, sized at over Rs 5,000 crore, witnessed robust investor interest across categories. The issue was subscribed to 79 times overall, with the retail portion booked more than 19 times, while qualified institutional buyers subscribed to their segment 120 times.
As per media reports, Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer, Meesho, said the company earns revenue by providing services to sellers, with logistics and advertising emerging as the key income drivers. He added that free cash flow remains the company’s most important performance metric, noting that Meesho has been free cash flow positive for the past two years and aims to sustain this discipline while scaling up its operations.
Shares of Meesho were trading at Rs 173.13 were down 5 per cent today, compared to tuesday’s session, 0.46 per cent higher at Rs 181.69.
