Meesho Limited Shares Plunge 10% in Second Consecutive Decline

Shares of Meesho Limited experienced a significant drop as the stock hit a 10% lower circuit on Monday. This marks the second consecutive session of decline for the newly listed e-commerce company. Over the past two trading days, Meesho shares have fallen by nearly 17%, following a 7% drop on Friday. The recent decline suggests that some investors might be taking profits after the stock’s strong rally post its market debut. Meesho shares had more than doubled from the IPO price in just over a week of listing, drawing substantial trading interest. Following Monday’s decline, the stock is now down approximately 21% from its post-listing high of Rs 254.40. Despite the correction, Meesho shares remain 82% higher than the issue price of Rs 111, showcasing significant gains for early investors. The company’s market capitalization has now decreased to around Rs 91,188 crore. Meesho’s IPO, which was open for three days and valued at over Rs 5,000 crore, received a remarkable response from investors. The overall issue was oversubscribed by 79 times, with retail investors showing strong interest by subscribing nearly 19 times, while the qualified institutional buyers’ portion was oversubscribed by 120 times. On Monday, Meesho shares were locked at the lower circuit price of Rs 201.68, after reaching an intra-day high of Rs 223.65 earlier in the session. The stock had a strong debut on the exchanges, listing at Rs 162, a 46% premium over the IPO price. On the first day of trading, the shares closed near Rs 170. In the seven trading sessions post-listing, Meesho shares surged by almost 110% from the issue price. This rapid increase led to a short squeeze, with traders who had shorted the stock unable to deliver shares on time. Consequently, over one crore shares were put into the exchange auction mechanism. Such sharp price movements are common in stocks with limited freely available shares.