Lock In Expiry Hits Meesho Shares Though Brokers Stay Bullish

Shares of e commerce company Meesho slipped around five percent on the stock market recently after a major lock in period came to an end. The stock traded lower near 173 rupees as a large number of previously restricted shares became available for trading. This sudden increase in the supply of shares in the open market created short term pressure on the stock price, leading to the decline.

Meesho was listed on the stock exchange not long ago and like most newly listed companies a portion of its shareholding was subject to a lock in period. Such lock in rules are designed to prevent early investors and insiders from selling their shares immediately after listing which could otherwise cause sharp volatility. Once this lock in period expired nearly 110 million shares representing about two percent of the company’s total equity became tradable. The availability of these shares led to increased selling activity in the market.

While the drop in share price may have unsettled short term traders many analysts and brokerage firms are looking beyond this immediate reaction. They believe that the decline is largely technical in nature and does not reflect any weakening in Meesho’s underlying business. According to market experts the company’s core operations remain stable and its long term growth outlook continues to be positive.

Some analysts also point out that a lock in expiry does not automatically mean that all eligible shareholders will sell their holdings. It simply provides them with the option to trade. In several cases early investors choose to remain invested if they are confident about the company’s future prospects and growth strategy.

Another reason behind continued optimism is Meesho’s performance since its listing. The stock has witnessed phases of strong gains and has drawn investor attention due to its position in India’s fast growing online shopping space. As more consumers turn to digital platforms for everyday purchases e commerce companies like Meesho are viewed as long term beneficiaries of changing consumption patterns.

That said investors are reminded that stock markets are inherently volatile. Share prices are influenced by multiple factors including broader market sentiment sector trends and global economic conditions. Despite this the prevailing view among many market observers is that the recent fall could be a normal correction rather than a sign of deeper trouble.

Overall while Meesho shares declined following the lock in expiry analysts remain optimistic about the company’s long term prospects believing that its business fundamentals continue to support future growth.