Shares of e-commerce major Meesho Limited slipped 5% today, hitting the lower circuit on account of expiry of the mandatory one-month lock-in period for anchor investors. With the lock-in ending, approximately 10.98 crore shares, representing 2% of the company's total equity, became eligible for trading for the first time. This supply overhang triggered a short-term volatility resulting in the share price dip.

Analysts remain bullish on Meesho's 'Bharat' moat

However, leading global and domestic brokerages have reaffirmed their "BUY" ratings, grounded in the platform’s unique position as India’s "mass-market e-commerce engine".

UBS and Choice Institutional Equities argue that Meesho's structural competitive advantages remain unmatched in the value-commerce segment.

• Democratising rural shopping: Meesho has become the largest e-commerce platform by annual transacting users (ATUs), which surged from 136 million in FY23 to 234 million in FY25. UBS highlights that its focus on Tier-2 and Tier-3 cities provides a long-term growth runway as digital adoption accelerates in these "second tier" towns.

Path to profitability

Choice Institutional Equities expects Meesho to reach EBITDA breakeven by FY27E.

• Negative working capital: Unlike many internet peers, Meesho operates on a negative working capital cycle, paying partners 8–20 days after collecting cash, which is expected to drive free cash flow (FCFE) to ₹38 billion by FY30.

While competition from Amazon Bazaar and Flipkart’s Shopsy remains a key risk, analysts believe Meesho’s "everyday-low-price" positioning and AI-driven discovery (which accounts for 75% of orders) create a defensible moat that incumbents struggle to replicate without damaging their own margins.

Meesho shares ended 5% lower at ₹173.13 apiece on the NSE on Tuesday. The company debuted on the bourses on December 10 at ₹162.50 apiece, at a premium of 46% against the issue price of ₹111 per share.