Meesho Limited shares hit the lower circuit limit with a 5% decline to ₹173.13 following the expiry of its one-month shareholder lock-in period, which freed up a significant portion of shares for trading and intensified supply pressure concerns.

Lock-in Expiry Creates Supply Overhang

The expiry of the lock-in period has made approximately 109.9 million shares eligible for trading, representing about 2% of Meesho's outstanding equity. This technical supply overhang has created immediate pressure on the stock, resulting in the shares getting locked in the lower circuit.

Market participants should note that while the lock-in expiry makes these shares available for trading, it does not guarantee immediate selling by all shareholders.

Stock Performance Remains Strong Despite Correction

Despite the recent decline and circuit hit, Meesho shares continue to trade at a substantial premium to their initial public offering price. The stock has gained nearly 64% from its issue price of ₹111, though it has corrected about 28% from its post-listing peak of ₹254.

Brokerage Outlook Remains Positive

Despite the supply concerns, global brokerage UBS has initiated coverage on Meesho with a 'Buy' rating and a target price of ₹220. The brokerage cited the company's asset-light model, negative working capital cycle, and consistent cash flow generation as key strengths.

UBS expects Net Merchandise Value to grow at a 30% compound annual rate, driven by expansion in annual transacting users from 199 million to 518 million and higher ordering frequency.

Strong IPO Performance and Market Debut

The SoftBank-backed e-commerce platform made its stock exchange debut, listing at ₹162, a 46% premium to the IPO price, and closing 53% higher on the first trading day. The company's three-day public issue was sized at over ₹5,000 crore and witnessed exceptional investor demand.

Choice Institutional Equities noted that Meesho is "best placed to monetise this shift via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users," setting a target price of ₹200, implying 80% upside from the IPO price.

January 8, 2025 represents a pivotal trading session for multiple recently listed companies as their respective shareholder lock-in periods conclude, potentially freeing up shares worth over ₹4,500.00 crore for market trading. The most significant developments involve e-commerce platform Meesho Limited and financial services giant Tata Capital, both of which will see substantial portions of their equity become eligible for trading.

Meesho's Lock-in Period Concludes

Meesho Limited reaches a major milestone as its one-month shareholder lock-in period expires, according to Nuvama Alternative & Quantitative Research. The conclusion of this restriction makes a substantial portion of the company's equity available for potential trading.

The e-commerce platform's shares continue trading significantly above their ₹111.00 issue price, though they have retreated from their post-listing peak of ₹254.00. Meesho made its stock market debut on December 10, 2024, listing at a premium and closing 53% above the IPO price on the first trading day. The company's three-day IPO, with an issue size exceeding ₹5,000.00 crore, attracted healthy subscription from both institutional and retail investors.

Tata Capital's Three-Month Lock-in Expires

Tata Capital, recognized as the largest IPO of 2025, simultaneously experiences the conclusion of its three-month shareholder lock-in period. The financial services company's lock-in expiry affects a significant portion of its equity base.

After trading within a narrow range for most of the past three months, Tata Capital shares have demonstrated upward momentum over the past two weeks, including a gain exceeding 6% on the previous Friday. The stock now trades 11% above its ₹326.00 issue price, reflecting improved market sentiment.

Analyst Sentiment and Market Reception

Tata Capital enjoys unanimous support from the analyst community, with all seven analysts tracking the stock maintaining 'Buy' ratings. Price targets reach as high as ₹410.00, suggesting significant upside potential from current levels. The company's ₹15,000.00 crore-plus IPO achieved full subscription by the close of bidding, with the stock debuting around its issue price and maintaining relatively stable trading patterns thereafter.

Additional Lock-in Expirations

Beyond the two major companies, several other recently listed entities also experience lock-in period conclusions. Aequs will see 16.7 million shares, representing 2% of its outstanding equity and worth approximately ₹230.00 crore, become eligible for trading. The company currently trades 10% above its IPO price, indicating positive market reception.

Vidya Wires faces a different scenario, with 8.7 million shares (4% of outstanding equity) worth about ₹44.00 crore coming out of lock-in. However, the stock trades 4% below its issue price, reflecting more subdued market performance.

Market Impact Considerations

The conclusion of shareholder lock-in periods represents a technical milestone rather than a guarantee of immediate market activity. While these shares become eligible for trading, the actual decision to sell remains with individual shareholders. Market participants will closely monitor trading volumes and price movements to assess whether significant portions of the unlocked shares enter the market, potentially affecting supply-demand dynamics for these securities.