Meesho shares slide sharply as lock-in expiry triggers fresh selling pressure
Shares of Meesho came under intense selling pressure on January 7, with the stock hitting the 5 percent lower circuit after the expiry of its one-month shareholder lock-in period. The decline pushed Meesho shares close to their listing price, marking a sharp reversal from the highs seen soon after its market debut.
The e-commerce platform’s stock fell to ₹173.13 per share, extending losses for the second consecutive session. The decline reflects investor caution as additional shares became eligible for trading, increasing near-term supply in the market.
Lock-in expiry puts over 10 crore Meesho shares in play
The immediate trigger for the fall was the expiry of Meesho’s one-month lock-in period. According to estimates cited by Nuvama Alternative and Quantitative Research, around 10.99 crore shares—nearly 2 percent of the company’s outstanding equity—have now become eligible for trading.
Based on the previous closing price of ₹182.24, these shares are valued at approximately ₹2,002.82 crore. While this does not mean all shares will be sold immediately, the availability of such a large quantity has weighed on sentiment.
Market participants explained that lock-in expiries often lead to short-term volatility. As one analyst noted, “Lock-in expiry doesn’t guarantee selling, but it raises the probability of profit booking by early investors, which markets tend to price in quickly.”
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Stock trades near listing price after sharp post-IPO swings
Meesho made a strong debut on December 10, listing at ₹162.50 per share on the NSE, a premium of over 46 percent to its IPO price of ₹111. The enthusiasm was driven by a blockbuster response to its ₹5,421-crore initial public offering, which was subscribed nearly 79 times.
After listing, the stock surged as much as 65 percent to hit a peak of ₹254.40 on December 18. However, the rally proved short-lived. Since that high, Meesho shares have corrected nearly 32 percent and are now hovering close to their listing price.
Despite the recent decline, the stock still remains above its IPO price, highlighting the strong initial demand but also the volatility typically associated with new-age internet listings.
Meesho market capitalisation remains sizeable despite correction
Even after the recent sell-off, Meesho continues to command a significant market presence. The company currently has a market capitalisation of around ₹78,136 crore, reflecting investor confidence in its long-term business model despite near-term valuation concerns.
Investors tracking the stock point out that sharp price movements are common in the early months after listing, especially when lock-in periods expire and price discovery continues.
Operational improvements strengthen Meesho’s long-term story
Analysts remain constructive on Meesho’s operational progress, even as the stock faces short-term headwinds. Abhinav Tiwari, Research Analyst at Bonanza, highlighted significant efficiency gains made by the company over the last few years.
Key operational improvements include:
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Cost per order reduced from ₹55 in FY23 to ₹46 in FY25
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Development of Meesho’s in-house logistics platform, Valmo
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Improved delivery density and reliability, especially in smaller towns
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Reduction in cash-on-delivery orders from over 90 percent earlier to about 61 percent in H1 FY26
“This improvement came from building its own logistics platform called Valmo and improving delivery density,” Tiwari said. “By reducing failed and repeat deliveries without heavy subsidies, Meesho has lowered operating risk and strengthened cash flows, making the business more capital-efficient and closer to profitability.”
Why Meesho shares are under pressure despite better fundamentals
Despite these positives, the stock has struggled in recent sessions. Analysts attribute this primarily to technical and valuation-related factors rather than any deterioration in business performance.
According to Tiwari, “The key reason behind today’s fall is the expiry of the IPO lock-in period, which has increased supply and led to selling by early investors and pre-IPO shareholders.”
He added that Meesho had also been trading at elevated valuation multiples compared with other consumer internet and retail peers. This made the stock vulnerable to profit-taking, especially amid a broader risk-off sentiment toward high-valuation new-age companies.
What investors should watch after the lock-in expiry impact
Looking ahead, analysts believe Meesho’s stock movement will depend on how the market absorbs the additional supply and whether selling pressure eases in the coming sessions.
For investors, key factors to monitor include:
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Stability in shareholding after lock-in related selling
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Progress toward profitability and cash flow improvement
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Valuation comfort relative to peers in the consumer internet space
As one market expert summed up, “Near-term volatility is likely, but if operational momentum continues, long-term investors may focus more on execution than on temporary price swings.”
For now, Meesho’s sharp correction serves as a reminder that while strong listings generate excitement, sustained performance ultimately depends on fundamentals and market sentiment working in tandem.
