Meesho Hits 20% Upper Circuit Post UBS’ Thumbs Up

SUMMARY

The SoftBank-backed company’s shares were locked in its 20% upper circuit at INR 216.35 during intraday trading on the BSE today

Meesho’s market capitalisation also zoomed to $10.81 Bn (INR 97,641.59 Cr), almost double its IPO valuation of about $5.5 Bn

UBS initiated coverage on the stock with a 'Buy' recommendation and set a price target of INR 220 for the stock

Ecommerce giant Meesho’s shares continue to rally post a bumper listing last week. The SoftBank-backed company’s shares were locked in its 20% upper circuit at INR 216.35 during intraday trading on the BSE today (December 17)

With the rally today, its shares have now gained about 34% from its listing price of INR 161.2 and a whopping 95% from its IPO price of INR 111. Its market capitalisation also zoomed to $10.81 Bn (INR 97,641.59 Cr), almost double its IPO valuation of about $5.5 Bn (INR 50,000 Cr).

The rally today comes at the behest of UBS initiating coverage on the stock with a ‘Buy’ recommendation. The brokerage firm also set a price target of INR 220 for the stock, 22% higher than previous close.

The brokerage firm’s rationale behind the positive rating of the stock stems from Meesho’s asset-light model, strong user growth and steady improvement in financial metrics. It estimates Meesho’s annual transacting user (ATU) base to grow to 51.8 Cr by FY30 from 19.9 Cr at the end of the previous fiscal year. As a result, net merchandise value (NMV) is also expected to increase by 30% in the aforementioned period.

“The company’s asset light, negative working capital business model has also ensured positive cash flows, unlike other internet businesses,” the brokerage noted.

The report mirrors the IPO notes released by brokerages ahead of Meesho’s listing. In its IPO note, ICICI Securities cited Meesho’s efficient business model and reasonable valuation behind its recommendation to subscribe to the public float. For context, Meesho’s public float priced the company at a 5.3x P/S multiple, well below other consumer internet company’s P/S multiple for the fiscal.

Consequent to receiving a 79X oversubscription to its offer, the company’s shares listed on the BSE with a 45% premium at INR 161.2.

Meesho’s IPO comprised a fresh issue of INR 5,421 Cr and an offer for sale of up to 10.6 Cr shares. Cofounders Vidit Aatrey and Sanjeev Kumar and investors like Elevation Capital, Peak XV Partners, Venture Highway, and Y Combinator offloaded shares via the OFS.

Y Combinator, which sold 71.9 lakh shares in the IPO, clocked a 108X return from the public issue, while Elevation Capital generated a 37X return on its investment.

On the financial front, the company reported a consolidated net loss of INR 701 Cr in the first half of FY26, down 72.1% from INR 2,513 Cr in the same time period last year. Operating revenue rose 29% to INR 5,578 Cr during the period under review from INR 4,311 Cr in H1 FY25.