- Shares of Meesho rose 5% after Jefferies initiated coverage with a buy call and Rs 225 target
- A block deal of 9.3 crore shares worth Rs 1,540 crore occurred after the six-month lock-in expiry
- Meesho shares trade 52% above listing price but have declined 8% year-to-date
Shares of e-commerce giant Meesho rallied 5% in early trade on Wednesday, June 10, aftre global brokerage Jefferies initiated coverage with a 'buy' call on the stock with a target price of Rs 225, implying a potential upside of 33%. This comes after after 9.3 crore Meesho shares, representing about 2% equity, changed hands in a block deal worth Rs 1,540 crore. Shares of online retailer gained momentum in early trade after the opening bell amid a positive sentiment in the domestic stock market.
Shares of Meesho opened at Rs 173, nearly 4% higher than its previous close of Rs 166.73 and extended gains till 5%, hitting an intraday high of Rs 174.86 apiece on the NSE. Shares last traded 0.07% higher at Rs 166.71 apiece against a 0.58% rise to 23,375.95 in the benchmark NSE Nifty 50 index. The stock trades over 52% higher than its listing price of Rs 111. The stock has shed 5% in one week, 16.5% in one month, and 8% on a year-to-date basis. Meesho commands a market cap of Rs 76,515.74 crore.
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Meesho Share Price Intraday
The block deal comes after comes a day after the expiry of the company's six-month shareholder lock-in period, which made a large portion of pre-IPO holdings eligible for trading. According to Nuvama Alternative & Quantitative Research, nearly 3,080 million shares or 68% of Meesho's outstanding equity became eligible for trading on June 10. However, the lock-in expiry does not necessarily imply immediate selling by investors. Subsequently, as many as 9.3 crore shares of Meesho or 2% of the company's outstanding equity shares changed hands during the block deal window.
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Why is Jefferies taking a bullish bet on Meesho?
Meesho is building a scale-led value commerce platform anchored in affordability, discovery, and logistics efficiency, Jefferies said in its note, adding that a loyal user base, supported by a deep MSME supply network, is driving a strong flywheel. Jefferies expects monetisation to improve as scale expands and forecasts around 25% net merchandise value (NMV) CAGR through FY30, along with an EBITDA margin of around 3% by FY30. A negative working capital, coupled with a net cash balance sheet will support capital-efficient growth for Meesho, Jefferies said. The brokerage flagged high cash-on-delivery (CoD) dependence, logistics disruption, and regulatory and macroeconomic headwinds as key risks.
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