New Delhi: Meesho made a powerful entry into the Indian stock market on Wednesday, with its shares listing at a 46 percent premium after the company raised 604 million dollars through its initial public offering. The stock opened at about 162 rupees on the National Stock Exchange, well above the issue price of 111 rupees.
The strong debut pushed Meesho’s market value to nearly 8.8 billion dollars, reflecting high investor confidence. Demand for the IPO was extremely strong, with bids worth around 28 billion dollars, making it one of the most sought after offerings of the year.
The e commerce company has built its business by selling low cost fashion and lifestyle products, especially to value focused customers. Its approach of not charging commission from sellers and keeping advertising costs modest has helped it expand quickly across India’s smaller towns.
Soon after listing, Meesho’s shares rose further and touched about 175 rupees during the day. Market analysts noted that the company’s lower initial valuation made the IPO attractive, but they also cautioned that future growth will depend on how well Meesho manages rising competition and improves its earnings.
Some brokerages began coverage on the stock soon after the debut, with at least one giving it a buy rating and setting a target price near 200 rupees. Analysts said the interest shown by major investors signals confidence in the long term potential of India’s fast growing online shopping market.
Meesho’s strong listing adds to a series of successful IPOs in India this year and highlights the continued appetite for technology driven consumer businesses.