Meesho Share Price Today Hits Lower Circuit! Stock Down 5% Due To Lock-In Expiry; Time To Buy?

Meesho Share Price Today: Shares of Meesho Limited fell nearly 5% during Wednesday's intraday trade to dip to the lower circuit market. The sharp decline in Meesho's share price has come as millions of shares became eligible for trading due to anchor lock-in expiry.

Meesho shares dipped 4.99% to touch the lower circuit of Rs 173.2 per share on BSE with a market capitalisation of Rs 4,842.94 crore.

Why Are Meesho Shares Falling Today?

The sharp decline in Meesho shares on Wednesday came nearly a month after the company's initial public offering (IPO) was listed on the Indian stock market. The newly listed e-commerce company saw its shares decline after the expiry of its one-month anchor lock-in period.

Nearly 110 million shares of Meesho, which is 2% of the outstanding shares of the company, will be available for trading on Wednesday, according to the Nuvama institutional equities report.

The stock had closed at Rs 182.3 per share on Tuesday and declined nearly 5% on Wednesday. Meesho shares made a strong Dalal Street debut in the Indian stock market on December 18. The stock market was listed at nearly 64% premium from its issue price of Rs 111.

Meesho Share Price Recommendation

UBS gave a 'Buy' rating for one month on the Meesho share price. Meesho is India's largest e-commerce platform based on annual transacting users (ATUs). The company runs a marketplace connecting buyers, sellers and logistic partners, and growth flywheel.
"We believe Meesho's focus on lower / middle income consumers in India's Tier 2 and 3 cities provides a growth runway as online adoption accelerates among these consumers. The company's asset light, negative working capital business model has also ensured positive cash flows, unlike other Internet businesses," noted UBS in its report released in December.

Meesho Share Price Target

Meesho shares have received a 'Buy' rating with a target price of Rs 220 for the twelve months. "Our price target is based on combined SOTP and DCF. We use 3-year forward EV to EBITDA of 40x, in-line with multiples of Eternal and Nykaa and close to "steady state" multiple we use for our Swiggy price target. Our DCF model is based on assumed WACC of 11.1% and terminal growth of 5%," stated the brokerage in its report.

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