Meesho Shares Hit Record High as UBS Turns Bullish; Stock Up 95% From IPO Price

E-commerce firm Meesho's shares hit a record high, surging nearly 95% over its IPO price. This rally was triggered after global brokerage UBS initiated coverage with a 'Buy' rating and a Rs 220 target price.

Shares of newly listed e-commerce firm Meesho continued their strong post-listing rally on Wednesday, hitting a fresh all-time high for the second straight session. Investor enthusiasm picked up after global brokerage UBS initiated coverage on the stock with a ‘Buy' rating, triggering heavy buying interest.

The stock was locked in a 20 per cent upper circuit at Rs 216.35 on the BSE during intra-day trade. With this surge, Meesho has now gained nearly 95 per cent over its IPO price, marking one of the strongest debuts among recent listings.

Three-day rally delivers sharp gains

Wednesday's move marked the third consecutive session of gains for Meesho shares. The stock had risen 5.6 per cent and 3.4 per cent in the previous two sessions, delivering an impressive 31 per cent return in just three trading days.

The rally comes on the back of sustained investor interest following the company's blockbuster market debut earlier this month.

UBS initiates ‘Buy’, sets target of Rs 220

The latest leg of the rally was sparked by UBS initiating coverage on Meesho with a ‘Buy' recommendation and a target price of Rs 220. The brokerage's target implies nearly 10 per cent upside from Wednesday's peak levels.

UBS highlighted Meesho's asset-light business model, strong user growth and improving financial metrics as key positives supporting its optimistic outlook.

Why UBS is positive on Meesho

In its note, UBS said Meesho's negative working-capital structure sets it apart from many other internet companies and supports strong cash flow generation.

“We believe Meesho's asset-light, negative working-capital business model positions it well for sustained profitability, supported by a 30 per cent NMV CAGR, rising user engagement and expanding order frequency through FY30,” UBS said.

The brokerage expects Meesho's net merchandise value (NMV) to grow at a 30 per cent compound annual growth rate between FY25 and FY30. Annual transacting users are projected to jump from 199 million to 518 million, while order frequency is seen rising from 9.2 times to 14.7 times over the same period.

What the numbers suggest going ahead

UBS also expects Meesho's average order value to decline from Rs 274 to Rs 233 as the company passes on logistics efficiencies to customers. Despite this, margins are expected to improve, with contribution margin projected at 6.8 per cent and adjusted EBITDA margin seen reaching 3.2 per cent of NMV by FY30.

At the same time, some analysts have advised caution. Utsav Verma, Head of Research at Choice Institutional Equities, said his base-case target price of Rs 200 suggests limited near-term upside from current levels, while a bull-case valuation of Rs 234 depends on stronger execution, monetisation gains and operating leverage.

A blockbuster market debut

Meesho had made an eye-catching debut on the stock exchanges last week, listing at a premium of more than 46 per cent to its issue price of Rs 111.

On the NSE, the stock opened at Rs 162.50, a 46.40 per cent jump, before rising as much as 55.58 per cent to Rs 172.70. On the BSE, it listed at Rs 161.20, up 45.22 per cent.

IPO details and use of funds

The Rs 5,421-crore Meesho IPO had seen massive demand, with the issue subscribed 79.02 times at close. The price band was fixed at Rs 105–Rs 111 per share. The issue included a fresh issue of Rs 4,250 crore and an offer for sale of 10.55 crore shares worth Rs 1,171 crore at the upper end of the price band.

The company has said it will use the IPO proceeds to strengthen cloud infrastructure, expand brand and marketing efforts, explore inorganic growth opportunities such as acquisitions and partnerships, and meet general corporate requirements.

Why Meesho stands out in e-commerce

Meesho has emerged as India's largest e-commerce platform by annual transacting users and order volumes in the twelve months ended September 30, 2025. Its value-focused approach, centred on affordable products, has helped drive repeat purchases and high engagement.

While average order value fell from Rs 336.71 in FY23 to Rs 274.27 in FY25, total orders surged from 102.4 crore to 183.4 crore in the same period. Annual transacting users grew at a 20.7 per cent CAGR, rising from 13.6 crore to 19.8 crore.