Meesho stock tank 10% after ₹1,500 crore income tax demand, shareholder lock-in ends

Shares of e-commerce platform Meesho Ltd. declined 10% on Monday, March 9, after it received an assessment order from the income tax department’s assessment unit as it raised a tax demand of ₹1,499.73 crore, including applicable interest.The department raised the demand for the assessment year 2023-24.

As per Meesho’s disclosure, the demand followed income tax department’s additions and adjustments to the company’s income for the assessment year.

Meesho said it was evaluating the assessment order and did not concur with the observations and adjustments made by the tax authority. It said it has adequate legal and factual grounds to contest the order and is taking the required steps to protect its interest.On another note, around 109.9 million of Meesho’s shares, or 2% of its outstanding equity, has become eligible for trading on Monday, as per Nuvama Alternative and Quantitative Research. As of Friday’s close, these shares were valued at ₹1,857.3 crore.

However, the lock-in period ending does not imply that the outstanding shares will be sold in the open market, but they will only become eligible to trade.

The stock is trading nearly 22.6% above its IPO price of ₹111 apiece.

Shares of Meesho are trading 10% lower at ₹143.8. The stock is down 44% from its post-listing high of ₹254.

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