Meesho shares rally 4% on day 2 after blockbuster debut. Should you buy, sell or hold?

If Meesho’s blockbuster debut had your attention, day two has likely locked you in. The stock climbed as much as 3.9% on Thursday to Rs 176.80 on the BSE, extending its explosive post-listing run and taking the gains to roughly 59% over the IPO issue price of Rs 111. For investors who watched the listing frenzy unfold yesterday, or missed their chance, the question staring you in the face this morning is simple: is this the moment to buy, sit tight or take some money off the table?

Meesho closed its first day of trade on Wednesday at Rs 170.2 after debuting with a 46% premium, one of the strongest openings for a digital-first company in recent years. The stock listed at Rs 162.05 on the NSE and Rs 161.20 on the BSE against an issue price of Rs 111, rising further to Rs 172.65 on the BSE and Rs 172.70 on the NSE in early trade.

Brokerages had widely expected a strong debut, encouraged by hefty subscription numbers and Meesho’s positioning as one of India’s fastest-scaling online marketplaces. Choice Institutional Equities said that “Meesho is best placed to monetise this shift via its zero-commission, low-AOV, discovery-led platform serving Tier-2/3 users. Long-tail depth, content-led demand and logistics integration enable superior unit economics, with rising ad/fintech/fulfilment monetisation makes Meesho the most leveraged play on the next 100–150Mn mass-market users.”

The brokerage initiated coverage with a ‘buy’ rating and a target price of Rs 200, projecting an 80% upside from the issue price. It added that “Meesho’s industry-leading cost structure provides a sustained competitive edge in low-ASP categories, with incremental scale further widening the competitive gap,” and noted the company is on track for EBITDA breakeven in FY27.

Should you buy, sell or hold Meesho shares?

The question now dominating conversations is what investors should do after the stock’s two-day, near-vertical rise.Shivani Nyati, Head of Wealth at Swastika Investmart, said Meesho’s spectacular listing reflects strong appetite for India’s digital commerce expansion and confidence in the company’s “zero-commission” model. She highlighted the company’s deep Tier-II and Tier-III penetration, traction among women-led resellers and small entrepreneurs, and rapid order growth across fashion, beauty, home essentials and lifestyle categories.Nyati said Meesho’s strengths include tech-led operational efficiency, competitive pricing and a sharply improving profitability trajectory. But she cautioned that competitive intensity, regulatory clarity on discounting and the need to sustain profitability are key risks.She advised that “Investors/traders who received allotment may consider booking partial profits while holding the remaining position for medium to long-term gains, keeping a stop-loss around Rs 130 to manage potential volatility.”

Ahead of the listing, Prashanth Tapse of Mehta Equities had said short-term investors could consider taking listing gains, while high-risk investors could hold for 12–18 months to participate in the growth cycle. He pointed to Meesho’s category leadership in low-cost fashion and home and personal care as long-term positives, though valuations remain demanding.

What drove the Meesho frenzy?

Meesho’s IPO was subscribed 81.76 times overall — one of the strongest responses seen for a technology-led company this decade. Qualified institutional buyers subscribed 123.34 times, non-institutional investors 39.85 times and retail investors 19.89 times. The company drew 62.75 lakh applications, making it one of the most sought-after digital IPOs in recent memory.

The Rs 5,421 crore offer comprised a fresh issue of Rs 4,250 crore and an offer for sale of Rs 1,171 crore. Proceeds are earmarked for cloud infrastructure, AI and ML team expansion, logistics scale-up, marketing spends and potential acquisitions via its subsidiary MTPL.

Earlier, on December 2, Meesho raised Rs 2,439 crore from anchor investors, allotting nearly 22 crore shares to global long-only funds, sovereign wealth funds and domestic mutual funds.

Meesho’s business

Meesho runs an asset-light, affordability-led marketplace connecting consumers, small merchants, creators and logistics partners. It had 706,000 annual transacting sellers and 234 million annual transacting users in FY25.

Revenue grew 26% to Rs 9,901 crore in FY25, but net losses widened sharply to Rs 3,942 crore due to fulfilment, technology and competitive expenses. Losses in the first half of FY26 stood at Rs 701 crore.

The company is debt-free, but profitability and unit economics remain the most important focus areas for analysts.

The road ahead

Meesho enters the public markets with scale, strong demand and deep penetration across India’s consumption-driven internet economy and with scrutiny over profitability, competitive pressures and execution.

For now, the stock has delivered exactly what investors hoped for: explosive listing gains. What happens from here depends on how effectively Meesho translates its massive user base into profits and how much volatility you are prepared to navigate on the way.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)