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Post by : Badri Ariffin
Meesho, the indigenous e-commerce platform, made a remarkable entry into the stock market on Wednesday, debuting at a remarkable 46% above its initial public offering (IPO) price. Investor enthusiasm showcased their confidence in the company's future growth.
Shares commenced at Rs 162.50 on the National Stock Exchange (NSE), significantly higher than the IPO price range of Rs 105-111 per share, reflecting a sharp premium of 46.4%. On the Bombay Stock Exchange (BSE), the stock debuted at Rs 161.20, representing a gain of 45.23%. In intraday trading, Meesho's shares even reached Rs 177.49, marking an impressive 60% increase from the IPO price.
The IPO, which garnered an astonishing Rs 5,421 crore, saw massive investor interest, being subscribed 79 times during the primary market from December 3 to 5. Anchor investors brought in over Rs 2,439 crore, highlighting the market's optimistic outlook.
Meesho’s strong foothold in Tier-2 and Tier-3 cities distinguishes it from larger e-commerce competitors like Amazon and Flipkart. Moreover, the company is expected to attain Free Cash Flow (FCF) positivity by FY25, indicating efficient management even amidst net profit impacts from one-time costs. Analysts suggest that Meesho's valuation of about Rs 50,000 crore equates to roughly 5.5x Price-to-Sales for FY25, providing an appealing option within the value e-commerce sector.
The IPO funds are slated for enhancing cloud infrastructure, boosting marketing efforts, financing strategic acquisitions, and addressing general corporate needs. Meesho's debut symbolizes not just investors' eagerness for tech-driven retail platforms but also the firm’s expanding reach in India's underdeveloped e-commerce landscape.
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