Why Meesho's stock price doubled since its IPO

Meesho's recent stock market debut has been nothing short of spectacular, with its shares more than doubling from their initial public offering (IPO) price of ₹111 to reach highs of over ₹233. This surge has propelled the company's market capitalization to well over ₹1 lakh crore, signaling a pivotal moment for the Indian e-commerce landscape. The IPO itself was overwhelmingly popular, subscribed nearly 79 times, clearly demonstrating robust investor confidence right from the start.

This remarkable growth is largely attributed to Meesho’s distinctive strategy of focusing on "Bharat" – India's vast tier-2 and tier-3 cities. While competitors like Amazon and Flipkart often target metropolitan areas, Meesho's asset-light model and deep penetration into undeserved markets have resonated strongly with investors and consumers alike. As founder Anupam Mittal highlighted, success in India isn't just about large platforms but about local adaptation and understanding the unique consumption patterns of the Indian populace. India, he noted, doesn't merely consume platforms; it reshapes them.

Analysts widely view Meesho as a "multibagger" stock, with firms like UBS initiating coverage with a 'Buy' rating and a target price of ₹220. They anticipate significant improvements in key financial metrics, including a projected 30% Compound Annual Growth Rate (CAGR) in Net Merchandise Value (NMV) and an increase in Annual Transacting Users (ATUs) to over 518 million by fiscal year 2030. This optimistic outlook is rooted in Meesho’s expanding user base and its unique approach to market penetration, which prioritizes localization over a generic “brute force” strategy.

However, some analysts also caution about the current valuation, suggesting that much of the initial optimism might already be priced in. While acknowledging Meesho's "differentiated bet" on the Indian consumer market and its asset-light structure, they emphasize that the company still needs to demonstrate sustained profitability. The current valuation leaves little room for error, requiring Meesho to consistently improve monetization and execution to justify its premium. Nevertheless, the company's impressive market performance underscores a growing conviction that a localized, deeply integrated e-commerce model is the future for a significant portion of the Indian market.