Meesho slips 4%; Choice flags lock-in expiry as near-term overhang

Choice Institutional Equities has maintained an 'Add' on Meesho with a target price of ₹210, based on 4x FY28 EV/Revenue, flagging the impending lock-in expiry on June 9, 2026, as a near-term overhang

Meesho shares slipped 3.9 per cent on BSE, logging an intra-day low of ₹168.25 per share. However, at 12:50 PM, the stock recovered slightly but was down 3.77 per cent at ₹168.5 per share. In comparison, the BSE Sensex was down 0.04 per cent at 74,317. 

Choice Institutional Equities has maintained an 'Add' on Meesho stock with a target price of ₹210, based on 4x FY28 EV/Revenue, flagging the impending lock-in expiry on June 9, 2026, as a near-term overhang on the stock. 

Approximately 68 per cent of Meesho's pre-IPO shareholding — worth approximately ₹54,000 crore — will become eligible for trading from June 10, 2026, following the expiry of the lock-in period on June 9, 2026. This excludes approximately 20 per cent of the company's share capital, which remains under lock-in until June 9, 2027, as disclosed in the prospectus.  READ | JM Financial retains 'Reduce' on Meesho; flags pre-IPO lock-in expiry risk 

 

Even assuming only approximately 10 per cent of outstanding shares become available for trading immediately after lock-in expiry, potential secondary market outflows could be approximately ₹5,400 crore — nearly equivalent to the entire IPO size of Meesho. The brokerage expects this liquidity event to create temporary downward pressure on the shares, as early private equity and venture capital investors — sitting on significant unrealised gains — are likely to offload their holdings. 

Meesho's key operating metrics have improved meaningfully, but this has yet to translate into a material uplift in advertising monetisation, which is expected to be gradual. With most near-term positives largely priced in, the brokerage sees limited upside from current levels. 

The brokerage's long-term view on Meesho remains intact, anchored in strong user-led scale-up and continued expansion of the seller ecosystem. However, current fundamentals combined with the lock-in expiry event are expected to create near-term downward pressure on the stock. 

Disclaimer: The views and investment tips expressed by the analysts/brokerage are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.