Here’s how Meesho’s shares performed on day 2 after listing

Meesho, India’s largest e-commerce platform saw its shares rise 4% in today’s trade to hit a new high of ₹176.75 on the bourses. Currently, it is marginally down by 0.21%, at ₹169.75, as investors resorted to profit booking.

The rise in share price was on the bank of a post-market hour announcement that the company is investing ₹2,890 crore through a rights issue.  This investment will be for its unit Meesho Technologies Private Limited (MTPL), which is an application-based marketplace operated under the brand of 'Meesho' that connects sellers and end consumers. The company also clarified that there will be no change in the percentage of shareholding of the Company in MTPL and will continue to remain a wholly owned subsidiary.

The investment was done through a rights issue of over 131 crore equity shares at an average price of ₹22.05 apiece. MTPL's offerings span categories including fashion, accessories, electronics, home and kitchen items, health and fitness equipment, and office supplies.

Meesho saw a blockbuster listing yesterday, with its listing price at ₹161.20, a 45.23% premium to its ₹111 issue price, taking its market cap to ₹72,751.67 crore.

The Meesho IPO, which opened for bidding between December 3-5, was subscribed nearly 79 times as it received bids worth ₹2.42 lakh crore, with more than 2,196 crore shares bid against just 27.79 crore shares on offer.

The issue, priced at ₹105–₹111 per share, saw overwhelming institutional participation, with the QIB segment subscribed 120.18×, contributing bids worth ₹2,00,596 crore. The NII segment subscribed 39.85×, adding ₹32,409 crore, while retail investors subscribed 19.89×, bidding over 97 crore shares valued at ₹10,783 crore.

Ahead of the launch, Meesho had raised ₹2,439 crore through its anchor book, which was oversubscribed more than 32 times.  Top global funds including Tiger Global, BlackRock, GIC, ADIA and Fidelity, along with domestic giant SBI Mutual Fund, collectively poured in bids totalling nearly ₹80,000 crore. Out of the total allocation to the anchor investors, ₹1,040 crore worth of shares (or 45.91%) were allocated to 14 domestic mutual funds through a total of 52 total schemes, as per the exchange data.

Meesho IPO comprises a fresh issue of equity shares worth ₹4,250 crore and an offer for sale (OFS) of 10.55 crore shares worth ₹1,171 crore. Among the selling shareholders in the OFS are Elevation Capital, Peak XV Partners, Golden Summit, Y Combinator, and the promoters.

Meesho plans to use the proceeds from its fresh equity issuance to enhance its cloud infrastructure through its subsidiary, Meesho Technologies Private Limited, support salaries for its AI, machine learning and technology teams, and step up investments in marketing, brand building and strategic acquisitions. A portion of the funds will also be allocated to general corporate purposes.