Meesho shares jump 19%, extend gains to nearly 90% over IPO price

Meesho stock rose as much as 19 per cent during the day to a new high of ₹214.4 per share, the best session since listing on December 10 this year

Shares of recently-listed Meesho Ltd. extended their gains on Wednesday, rising over 19 per cent, backed by a bullish call from analysts at investment bank UBS. 

 

The e-commerce firm's stock rose as much as 19.05 per cent during the day to a new high of ₹214.4 per share, the best session since listing on December 10 this year. The stock pared gains to trade 16.8 per cent higher at ₹210.5 apiece, compared to a 0.04 per cent decline in Nifty 50 as of 11:17 AM. 

 

Shares of the company rose for the third straight session, rising nearly 30 per cent in the process. The counter has risen 89 per cent from the issue price of ₹111 per share. Meesho's market capitalisation rose to ₹94,256.74 crore on Wednesday. 

Meesho gets bullish views from UBS

The global brokerage UBS, according to media reports, initiated coverage with a 'Buy' rating with a price target of ₹220 per share. This is backed by the brokerage's expectations that Meesho's net merchandise value will grow at a compounded annual growth rate of 30 per cent between the financial year 2025 (FY25) and FY30. 

 

UBS expects contribution margins and adjusted Ebitda margins, as a share of net merchandise value, to improve steadily to 6.8 per cent and 3.2 per cent, respectively, by financial year 2030, driven by a sharp increase in the number of annual transacting users. Reports said that the brokerage estimates an improvement in annual ordering frequency from 9.2 times to 14.7 times. The average order values, however, are expected to decline from ₹274 to ₹233.  

 

Meesho is a multi-sided technology platform driving e-commerce in India by bringing together four key stakeholders -- consumers, sellers, logistics partners and content creators. It has emerged as one of the largest e-commerce players in India with Annual Transacting Users (ATU) of 234 million customers generating about 10x transactions of 2,270 million orders.

 

The recently concluded IPO was subscribed 79.03 times, led by qualified institutional buyers (QIBs), whose quota was subscribed 120.18 times. Meesho’s maiden public offering comprised a fresh issue of 382.9 million shares aggregating to ₹4,250 crore, and an offer-for-sale (OFS) of 105.5 million shares aggregating to ₹1,171.2 crore. On the NSE, Meesho shares were listed at ₹162.50 apiece, a premium of ₹51.50, or 46.40 per cent over the issue price.   ===== 

Disclaimer: The view/outlook has been suggested by UBS. Views expressed are their own.