Meesho Ltd.MEESHO₹184.42 +8.00%

Shares of e-commerce player Meesho Ltd. gained 13% on Tuesday’s early trades to reach a new high of ₹193.44 per share. In just 5 days after listing, the company’s share price is up 74% from its issue price of ₹111.

At 09:40 AM on Tuesday, the company’s market capitalization stood at over ₹86,000 crore. These gains came with increased trading activity as more than 66.84 lakh shares changed hands.

Meesho has emerged as one of the largest e-commerce players in India with more than 234 million customers generating 2,270 million orders annually (this is nearly 10 times of the number of customers)!

How does Meesho charge low prices?

Meesho operates a zero-commission, value e-commerce model where most gains are redirected to sellers to keep prices low. It’s revenue includes logistics fees, advertising and mall charges. The company has a thin margin profile, keeping it competitive in the price-sensitive value segment.

Unlike other tech-based consumer service companies in India, Meesho’s zero commission business model caters to customers in tier-2 and tier-3 cities in India. With it’s efficient business model, the company is able to achieve strong double digit revenue growth and consistent free cash flows.