Meesho shares double from IPO price, market cap hits Rs 1 lakh crore

Shares of Meesho doubled from their IPO price on Wednesday, delivering 110% during the last six trading sessions. The stock, which made its market debut on December 10 rose to a high of Rs 233.50 in the current trading session. The IPO price of Meesho stood at Rs 111.  Market cap of the firm crossed Rs 1 lakh crore for the first time. Market cap of the firm stood at Rs 1,000,823.35 crore. 

The Meesho stock jumped 20 percent to hit the upper circuit in the last session after UBS initiated coverage on the stock with a ‘Buy’ call and a target price of Rs 220 per share. 

Meesho operates in an asset-light, negative working capital business model, while ensuring positive cash flows, UBS said. It noted that the firm’s net merchandise value is estimated to grow at a CAGR of 30 percent over FY25-30.

Kunal Bajaj, Senior Research Associate at Choice Institutional Equities said, "The stock has now met our base-case target price of Rs 200, while the bull-case valuation of Rs 234(premised on stronger-than-expected improvements in monetisation, operating leverage and execution toward profitability) was also achieved.

At current levels, we believe the stock is largely valued in line with listed platform peers, compared with the valuation discount observed at the time of listing. As a result, we see limited near-term upside from current prices, barring any material upside surprises on growth, margins or monetisation beyond current expectations. "

Shares of Meesho made a bumper stock market debut on December 10. It listed at Rs 162.50 on NSE, a premium of 46.40 per cent over its issue price of Rs 111 apiece. Similarly, the stock was listed with a premium of 45.23 per cent over the issue price at Rs 161.20 on BSE.

The IPO of Bengaluru-based Meesho was sold between December 3 and December 5. It had offered its shares in the price band of Rs 105-111 per share with a lot size of 134 shares. The company raised a total of Rs 5,421.20 crore via IPO, which included a fresh shares sale of 38,28,82,882 shares worth Rs 4,250 crore and offer-for-sale (OFS) up to 10,55,13,839 shares.