Mumbai, Dec 22 Shares of Meesho Limited came under sharp selling pressure on Monday, as the stock hit a 10 per cent lower circuit.
This was the second straight session of decline for the newly listed e-commerce company.
Over the last two trading days, Meesho shares have fallen nearly 17 per cent, after dropping around 7 per cent on Friday.
The recent fall indicates that some investors may be booking profits after the stock’s strong rally following its market debut.
Meesho shares had more than doubled from the IPO price within just over a week of listing, attracting heavy trading interest.
After Monday’s decline, the stock is now down about 21 per cent from its post-listing high of Rs 254.40.
Despite the correction, Meesho shares are still up 82 per cent from the issue price of Rs 111 -- highlighting the strong gains made by early investors.
The company’s market capitalisation has now slipped to around Rs 91,188 crore.
Meesho’s IPO, which was open for three days and sized at over Rs 5,000 crore, had received an overwhelming response from investors.
The overall issue was subscribed 79 times. Retail investors showed strong interest, subscribing nearly 19 times, while the qualified institutional buyers’ portion was subscribed 120 times.
On Monday, Meesho shares were locked at the lower circuit price of Rs 201.68, after touching an intra-day high of Rs 223.65 earlier in the session.
The stock had made a strong debut on the exchanges, listing at Rs 162, a premium of 46 per cent over the IPO price. On the first day of trading, the shares had closed near Rs 170.
In the seven trading sessions after listing, Meesho shares surged nearly 110 per cent from the issue price.
This sharp rise led to a short squeeze, as traders who had sold the stock short were unable to deliver shares on time.
As a result, more than one crore shares were pushed into the exchange auction mechanism. Such sharp price movements are often seen in stocks where the number of freely available shares is limited.
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