7 January 2026: Shares of Meesho came under sharp selling pressure on Tuesday, hitting a 5 percent lower circuit after the expiry of the lock-in period for pre-IPO investors. The stock slipped to trade close to its listing price, extending its decline to nearly 32 percent from its December peak, reflecting cautious investor sentiment and increased supply in the market.
The lock-in expiry allowed early investors, including venture capital and private equity funds, to sell a portion of their holdings. Such expiries often lead to heightened volatility as market participants anticipate selling pressure from large shareholders seeking to book profits or rebalance portfolios.
Meesho had witnessed a strong debut following its listing, driven by optimism around India’s growing e-commerce sector and the company’s asset-light, social commerce-led business model. The stock surged in the weeks after listing, reaching its December high amid strong retail participation and bullish brokerage commentary.
However, the recent decline suggests that investors are reassessing valuations amid broader market volatility and concerns around profitability timelines. Despite revenue growth, Meesho continues to invest heavily in customer acquisition, logistics, and technology, keeping margins under pressure.
Market participants noted that the lower circuit was triggered by a surge in sell orders shortly after opening, with limited buying interest at higher levels. The imbalance pushed the stock to its circuit limit, restricting further downside for the session but signaling weak near-term sentiment.
Analysts believe that the lock-in expiry has introduced short-term uncertainty rather than altering the company’s long-term fundamentals. They point out that similar patterns have been observed in other newly listed technology firms, where post-lock-in selling temporarily weighs on share prices.
Broader weakness in technology and internet stocks also contributed to the decline. Rising global interest rates, valuation concerns, and selective risk appetite have led investors to rotate away from high-growth, loss-making companies toward more stable earnings plays.
Despite the correction, some market experts view the stock’s return toward listing levels as a valuation reset rather than a structural breakdown. They argue that Meesho’s focus on tier-2 and tier-3 markets, seller enablement, and cost efficiency could support growth over the medium to long term.
Retail investors, however, remain divided. While some see the dip as an opportunity to accumulate gradually, others remain cautious, citing limited visibility on profitability and intensifying competition in the Indian e-commerce space.
Company management has not commented on the stock movement but has previously reiterated its commitment to disciplined growth, improving unit economics, and expanding its merchant ecosystem.
As trading continues in the coming sessions, analysts expect volatility to persist until selling related to the lock-in expiry subsides. Investor focus is likely to remain on quarterly performance, cost controls, and guidance on the path to profitability.
For now, Meesho’s sharp fall serves as a reminder of the risks associated with newly listed growth stocks, particularly during periods of broader market uncertainty.
Summary
Meesho shares hit a 5 percent lower circuit after lock-in expiry, slipping near listing price and extending losses to 32 percent from December highs amid selling pressure and cautious investor sentiment.