Lock-in expiry hits Meesho shares: Stock slips 5% – why brokers are still optimistic?

E-commerce platform Meesho’s shares dropped by 5 per cent to Rs 173.20 on Wednesday on the BSE after a one-month lock-in period ended. This made 110 million shares, representing 2 per cent of the company’s equity, available for trading. Despite this dip, major brokerages remain positive about Meesho’s future growth potential.The stock, which is still trading 56 per cent above its initial public offering (IPO) price of Rs 111, has come down from its post-listing peak of Rs 254. Meesho’s market debut on December 10 was impressive, with the stock listing at Rs 162 and closing 53 per cent higher on day one.However, brokers have maintained a optimistic outlook, according to ET. UBS, a global brokerage firm, showed confidence in Meesho by giving it a ‘Buy’ rating with a target price of Rs 220. They predicted that the number of annual users will grow from 199 million to 518 million, though average order values might decrease from Rs 274 to Rs 233.Choice Institutional Equities shared this positive outlook, setting a target price of Rs 200. “Meesho is best placed to monetise this shift via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users. Long-tail depth, content-led demand and logistics integration enable superior unit economics, with rising ad/fintech/fulfilment monetisation makes Meesho the most leveraged play on the next 100–150Mn mass-market users,” it said.Market watchers are now curious whether Wednesday’s stock decline is just a temporary effect of the lock-in expiry or if it presents a buying opportunity before the company’s next growth phase. It’s important to note that while the lock-in expiry makes shares eligible for trading, it doesn’t necessarily mean immediate selling will occur.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)