The share price of Meesho is on a roll, rallying 13.3% to an intra-day high of Rs 193.44 on the National Stock Exchange. The stock was up 74.3% from the issue price. The newly listed stock has risen 18% in the last five trading sessions. This sharp rally in the share price also brought about a sharp surge in the personal stake of Vidit Aatrey, the co-founder of Meesho.
The Softbank-backed e-commerce major was listed at Rs 161.20 on December 10 at a 46% premium to the issue price. The stock rose as much as 60% on Day 1 of trading.
Meesho co-founder Vidit Aatrey enters billionaire club
Also, this rally in the stock price brought in gains for the co-founder of Meesho. Vidit Aatrey has become a billionaire after the company’s shares surged in today’s trade. Aatrey has 47.25 crore shares in Meesho, which represents an 11.1% stake. The co-founder’s holdings rose to about $1 billion, or Rs 9,140 crore.
While Sanjeev Barnwal, the other co-founder, who owns 31.6 crore shares in the firm, now holds a stake valued at around Rs 6,112 crore.
Before the listing, the stock price of Meesho was fetching a GMP of 32% to the issue price. The market participants keep an eye on GMP to track listing gains. However, one must understand that GMP is just an indicative metric of investor sentiment, and the actual listing price can be very different.
The IPO of Meesho was subscribed to a total of 79.02 times. Among investor categories, the non-institutional investors (NIIs) received 38.15 times subscription, while the Retail Individual Investors (RIIs) booked 19.04 times. The Qualified Institutional Buyers (QIBs) portion saw 120.18 times the subscription.
Meesho IPO key details
Meesho generated Rs 5,421 crore via a going public. The company fixed the price band between Rs 105-111 per equity share. This valued Meesho at Rs 50,096 crore ($5.6 billion) at the upper end. The IPO had a combination of both: fresh issue of shares worth Rs 4,250 crore, along with an Offer For Sale (OFS) of 10.55 crore shares valued at Rs 1,171 crore.
Meesho: What next for investors?
Before the listing of the IPO, speaking to FinancialExpress.com, Sunny Agrawal – Head of Fundamental Research at SBI Securities listed out that profitability in ensuing quarters is key, “Meesho is valued at a FY25 price-to-sales ratio of 5.3x on post-issue capital. Going forward, Meesho’s path to sustainable profitability will be a key monitorable, especially as it continues to make investments in technology, marketing and engineers.”
Sneha Poddar, VP at Motilal Oswal, highlighted that the company’s positioning in the consumer tech space is crucial, “Meesho is positioned as one of India’s most powerful long-term consumer-tech stories with a unique zero-commission & asset light model, deep Bharat penetration, a defensible logistics flywheel, and a rapidly scaling ad/content commerce engine.”
Overall, the street is betting on the demand and the value that Meesho has been pegging its growth on. They expect the zero-commission model and the value pricing will help add scale to Meesho’s business.