Meesho IPO Listing: Ecommerce Company’s Shares Make Strong Debut With Over 45% Premium

Meesho IPO Listing Price: Meesho’s shares listed on the NSE and BSE on December 10. Shares of the ecommerce company made a strong debut on the exchanges. Meesho shares listed with over 40 per cent premium compared to the issue price.

Meesho shares made their debut at Rs 161.2 per share with gains of 45.22 per cent against the issue price of Rs 111 per share on the BSE. Meesho shares listed at Rs 162.5 apiece on the NSE with a premium of 46.39 per cent.

Retail investors who were allotted a minimum of one lot or 135 shares would have gained at least Rs 6,952.5 (Rs 162.5 - Rs 111 x 135). As many as 3.276 million shares of Meesho changed hands on the BSE and the total market capitalisation of the company stood at Rs 72,751.67 crore.

Meesho IPO: Details

Meesho raised Rs 5,421.2 crore through its public issue. The ecommerce company’s public issue consisted of a fresh issuance of 382.9 million shares aggregating to Rs 4,250 crore and a share-sale of 105.5 million shares amounting to Rs 1,171.2 crore.

The minimum lot size for application for retail investors was fixed at 1 lot comprising 135 shares, which aggregated to an investment of Rs 14,985. The price band for Meesho IPO was fixed at Rs 105 to Rs 111 per share.

Meesho IPO saw strong demand in its three-day subscription window. Meesho IPO was subscribed 79.03 times across categories. As many as 21.96 billion shares of Meesho were bid for against the 277.93 million shares offered for subscription.

In the three-day bidding window, qualified institutional buyers led the demand for Meesho’s shares, booking their quota 120.18 times. On the other hand, non-institutional investors and retail individual investors booked their quota 38.16 times and 19.08 times respectively.

Meesho IPO: Objective

Meesho plans to use the money raised through the IPO for investment in its subsidiary MTPL(Meesho Technologies Private Ltd) for setting up its cloud infrastructure. The proceeds will also be utilised for paying salaries of existing and replacement hires for the Machine Learning and AI and technology teams undertaken by MTPL. A portion of the proceeds will also be used for marketing and brand initiatives for MTPL. The proceeds will also be used for funding inorganic growth through acquisitions.

Meesho: Business Model

Meesho operates an online marketplace which targets buyers in metro cities and people inTier 2 and Tier 3 cities. Notably, the company does not charge sellers commission for using its platform. However, the company generates revenue via logistics or shipping fees, promoted listings and advertising campaigns. The company also generates revenue from Value-Added Services such as Meesho Mall Fees, seller financing and assurance programs.

Meesho: Peers

While Meesho has no listed peers in the Indian market, the company competes with ecommerce players such as Flipkart & Myntra, Amazon India and Snapdeal.

At the time of writing, Meesho shares traded at Rs 176.01 apiece up by 7.75 per cent on the NSE. Meesho shares traded at Rs 174.70 apiece on the BSE up by 8.37 per cent.