Meesho shares tumble 21% in three sessions after a sharp post-IPO rally. Analysts flag valuation and profitability concerns, urging investors to watch execution closely.

Shares of Meesho have tumbled over 21% in just three trading sessions, following a sharp post-IPO rally. The stock dropped more than 8% on December 23, extending its losses for the third consecutive session. This comes after Meesho’s newly-listed shares surged 65% in just four sessions before losing momentum.

On Tuesday, Meesho shares closed at Rs 185.34 apiece, pushing the company’s market capitalization below Rs 85,000 crore.

Analyst Insights on Meesho’s Recent Slide

According to Abhinav Tiwari, Research Analyst at Bonanza, Meesho remains a strong long-term business, but the stock’s current elevated price makes the near-term risk-reward ratio unattractive. While the company’s growth story is promising, buying shares at such high levels may not fully account for execution risks and ongoing losses. Tiwari emphasized that despite steadily improving fundamentals, valuation concerns remain a key risk. He suggested that waiting for a more attractive entry price could offer better risk-reward potential for investors.

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Harshal Dasani, Business Head at INVasset PMS, noted that Meesho’s post-listing surge had already priced in a large portion of optimism. He highlighted that the company is still transitioning toward consistent profitability, and investor confidence is currently driven more by long-term potential than near-term earnings visibility. Dasani added that sustaining current share levels will require tangible progress in unit economics, operating leverage, and managing competitive intensity.

For investors, he advised focusing on execution and sustainable profitability, rather than headline growth. How effectively Meesho converts scale into consistent profits will determine whether the stock’s post-IPO re-rating is sustained or normalizes over time.

Meesho’s IPO and Market Debut

Meesho made a strong market debut on December 10, listing at Rs 162.50 per share on NSE, marking a premium of over 46% from its IPO price of Rs 111 per share. The e-commerce platform’s Rs 5,421-crore IPO was subscribed 79 times, reflecting robust investor demand.

Since listing, the stock has climbed around 32% above its listing price and 67% higher than its IPO price, before experiencing the recent pullback.