Meesho shares crash 10% to hit lower circuit — Is it an opportunity to buy?

Meesho shares came under significant selling pressure on Monday, December 22, extending losses to the second day in a row, as investors booked profits following a stellar run in the new-age e-commerce player following its listing in the Indian stock market earlier this month.

Meesho shares had hit a record high of ₹254.65 on Friday, but soon witnessed a selling spree. In Monday's trade, Meesho share price plunged 10% to hit the lower price band of ₹202.05 on the BSE, taking the two-day losses to over 14%.

Meesho IPO, priced at ₹111, had made a blockbuster debut on Dalal Street on December 10 this month, listing at a 46% premium over the offer price. The stock had extended gains to end 53% higher over the offer price.

Amid today's fall, Meesho has lost its multibagger stock status achieved last week. However, Meesho shares remain 82% above their IPO price, leaving strong returns for investors on the table.

Last week's rally of 35% in Meesho shares followed a bullish call from UBS as it highlighted its asset-light operating model, accelerating user base and improving financial metrics as reasons for its optimistic stance. The global brokerage had assigned a 'Buy' call with a target price of ₹220.

“We believe Meesho’s asset-light, negative working-capital business model positions it well for sustained profitability, supported by a 30% NMV CAGR, rising user engagement and expanding order frequency through FY30,” UBS said in its report.

Meesho shares: Opportunity to bottom fish?

Harshal Dasani, Business Head at INVAsset PMS, said the fall in Meesho reflects investor pushback on growth quality, not just valuation optics.

While headline GMV growth remains strong, profitability metrics are still evolving. In a market that has turned far more selective post-2025, investors are demanding clearer line-of-sight on cash-flow breakeven rather than top-line momentum alone, he added.

For investors, especially those considering entry purely on the back of the price revision, caution is warranted, Dasani opined.

Abhinav Tiwari, Research Analyst at Bonanza, last week had said that Meesho is a strong long-term business, but the current price makes the near-term risk-reward unattractive.

Meesho’s ₹5,421-crore IPO was subscribed 79.02 times, reflecting exceptional investor enthusiasm. The issue, priced at ₹105– ₹111, comprised a fresh issue of ₹4,250 crore and an OFS of 10.55 crore shares worth ₹1,171 crore at the upper band.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.