Meesho shares down 29% in 4 trading sessions: Will it follow the same path as Nykaa and Ola?

Synopsis: The share of the company fell 28.58 percent in the last four trading sessions after making a high of Rs. 254.65 on last Thursday. What could be the possible reasons for the fall and will it follow the same path as the other 2 IPOs.

The shares of the company that operates under the brand name of Meesho, which connects sellers and end consumers. Its offerings span categories including fashion, accessories, electronics, home and kitchen items, health, fitness equipment, and office supplies are in focus.

With the market capitalization of Rs. 83,718.58 crore, Meesho Ltd’s shares on Tuesday made a day low of Rs. 181.85 per share, to hit a lower circuit of 10 percent from its previous day’s close price of Rs. 202.05 per share. The share has given a return of 12.32 percent from its listing date.

What Happened

Comparison to IPOs like FSN E-Commerce Ventures Ltd (Nykaa) and Ola: Messho Ltd. in their IPO filings has reported loss a of Rs. 700.72 crore where  Nykaa’s had posted a profit of  Rs. 35.22 crore and Ola Electric’s posted a loss of Rs. 1,584 crore in their listing period. Steep Valuation, Messho and Ola had a negative PE, whereas Nykaa had an inconsistent profit during the listing period.

Bumper listing: Messho ltd’s share made a day high on listing of Rs. 177.55, up by 59.95 percent from its issue price of Rs. 111 per share. Whereas Nykaa made a day high on listing of Rs. 2,248.10 up by 99.83 percent from its IPO price of Rs. 1,125.00 per share (pre split price) almost doubling the shareholder return, and Ola Electric on listing made a day high of Rs. 91.18 per share, up around 20 percent from its IPO price of Rs. 76 per share.

FSN E-Commerce Ventures Ltd’s share fell by 73.36 percent after marking an all-time High of Rs. 428.95 per share (Post split) to an all-time low of Rs. 114.25 per share. Ola Electric Mobility Ltd share fell by 80.45 percent after marking an all-time High of Rs. 157.4 per share to an all-time low of Rs. 30.76 per share.

If Meesho is able to execute its plans to meet the objective it stated, i.e. Investment in its subsidiary and funding inorganic growth through acquisition, etc. and is able to justify its high valuations, it might not fall into the category of IPO like Nykaa and Ola Electric, which reduced the value of shareholders by more than 70 percent.

Experienced a short squeeze:  Just 6 percent of Meesho shares trade freely, with most held locked by promoters and initial investors. Such limited supply sends prices skyrocketing on minor buying, trapping shorts who are then forced to cover amid the chaos. Recently in Meesho short sellers got caught up in short squeeze which led to 1 crore shares coming into auctions market.

Orders once placed in an auction period of 30 mins after 2:30 pm cannot be changed, which forces the sellers to buy shares back at high premiums that can go up to 20%. The same happened in Groww last month after its rally, with only 7 percent free float, 30 lakh of its shares flooded the market when short sellers couldn’t deliver.

Profit Booking as Profits Remain Uncertain: Intense early hype fueled Meesho’s mid-December surge, with buyers piling in and shorts scrambling to cover. But as the rally cooled, investors started cashing out gains, sparking a healthy dip. Momentum flipped fast, hitting the stock hard with selling pressure.

Meesho’s buzzing social commerce and revenue growth look great, yet steady profits are still optimistic. Investors are uncertain on when real earnings will show, especially with pricier funding and a market now obsessed with bottom lines over hype.

About the company 

Incorporated in 2015, Meesho Limited is a multi-sided technology platform driving e-commerce in India by connecting four key stakeholders — consumers, sellers, logistics partners, and content creators. The company operates its e-commerce marketplace under the brand name Meesho, enabling consumers to access a wide range of affordable products while offering sellers a low-cost platform to grow their businesses.

The company came up with the IPO objective of pumping funds into key growth areas, like shelling out Rs.1,390 crore for cloud infrastructure in their subsidiary MTPL. They also plan to cover Rs. 480 crore in salaries for existing and new hires in machine learning, AI, and tech teams to boost development there. Another Rs.1,020 crore goes toward marketing and brand pushes via MTPL, while Rs.1,197.83 crore is earmarked for acquisitions, strategic moves, and general business needs.

Financial performance, the company’s revenue increased by 26%for the financial year ending FY24-25 and reported a negative EBITDA of Rs. 551.87 crore as of September 30, 2025. Followed by a negative profit after tax (PAT) of Rs. 700.72 crore in Q2 FY26.

Written by GOurav Pratap SIngh

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