Shares of e-commerce platform Meesho faced significant selling pressure on Wednesday, January 7, declining by 5% to hit the lower price band of ₹173 per share on the National Stock Exchange (NSE). The drop coincided with the expiration of a one-month lock-in period for certain shareholders, which dramatically increased the supply of shares available for trading in the secondary market.
Why the Lock-in Period Matters
The one-month lock-in restriction for pre-IPO investors, who had invested in Meesho before its public listing in December 2025, ended today. According to a report from CNBC-TV18 citing Nuvama Alternative and Quantitative Research, this expiration made up to 109.9 million equity shares eligible for trading. This volume represents approximately 2% of the company's total outstanding equity.
An IPO lock-in period is a predetermined timeframe that prevents specific shareholders—such as promoters, the company itself, and early investors—from selling their holdings in the open market. This mechanism is designed to provide stability to the stock price and bolster investor confidence during the initial volatile phase after a listing. The duration of such lock-ins can vary from a few months to several years, based on regulatory norms and agreements set during the public offer.
When a lock-in period lapses, it enhances market liquidity as previously restricted shares enter the trading pool. However, it also carries the risk of a sudden sell-off if these shareholders decide to exit their positions, potentially exerting downward pressure on the stock price, as witnessed with Meesho.
Meesho's Rollercoaster Ride Since Listing
Meesho made a spectacular market debut on December 10, listing at ₹162 per share—a hefty 46% premium over its issue price of ₹111. The stock continued its strong performance in subsequent sessions, scaling to a high of ₹254 and establishing itself as one of the standout post-listing performers among mainboard IPOs in 2025.
However, the upward momentum stalled in recent trading sessions as investors began to book profits. Despite the recent correction, the stock remains 56% above its IPO issue price, though it has retreated 32% from its peak of ₹254.
Analyst Perspective on the Sell-off
Commenting on the decline, Abhinav Tiwari, Research Analyst at Bonanza, identified the lock-in expiry as the key trigger. "The key reason today is the expiry of the IPO lock-in period, which has increased the supply of shares in the market and led to selling by early investors and pre-IPO shareholders," he stated.
He further added that the stock had been trading at elevated valuation multiples compared to its peers in the consumer internet and retail space, which prompted profit-taking. "This lock-in related supply, combined with broader risk-off sentiment toward high valuation new-age stocks, has resulted in valuation de-rating, even as the underlying business performance remains largely intact," Tiwari opined.
About Meesho: Incorporated in 2015, Meesho Limited operates a multi-sided e-commerce platform in India, connecting consumers, sellers, logistics partners, and content creators. It focuses on offering affordable products and a low-cost growth platform for sellers.
The company's ₹5,421-crore IPO, open for subscription from December 3 to December 5, was met with robust investor appetite, getting subscribed over 82 times. The offer was primarily driven by strong demand from institutional investors.
On the financial front, Meesho reported a net loss of ₹3,942 crore in FY25, largely attributed to one-time transition-related taxes. However, its performance showed improvement in the first half of FY26, with losses narrowing to ₹700.72 crore. Concurrently, revenues saw healthy growth, rising to ₹5,577.54 crore in H1 FY26 from ₹4,311.29 crore in the same period a year earlier.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms. Investors are advised to consult certified experts before making any investment decisions.
