Shares of Indian e-commerce company Meesho came under pressure after two major developments triggered selling in the market. The company received a tax demand of nearly ₹1,500 crore from the Income Tax Department, while the expiry of its shareholder lock-in period also increased the supply of shares in the market.
According to regulatory disclosures, the tax authority issued an assessment order demanding ₹1,499.73 crore for the assessment year 2023-24. The order was issued under Section 143(3) of the Income Tax Act, along with a demand notice under Section 156.
Tax authorities typically issue such notices after reviewing a company’s financial statements and making adjustments or additions to its reported income. These changes can increase the amount of tax the company is required to pay.
However, Meesho has said it disagrees with the findings in the assessment order. The company stated that it believes it has strong legal and factual grounds to challenge the demand. In its filing, the company said it plans to take appropriate legal steps to contest the order and protect its interests.
Meesho also added that the tax demand is not expected to have a material impact on its business operations or overall financial position.
This is not the first time the company has faced a tax dispute. Earlier, Meesho received a similar demand for the assessment year 2022-23. The company challenged that order as well, and the case is currently pending before the Karnataka High Court. The court had earlier granted an interim stay on that demand notice.
Apart from the tax demand, the company’s shares also faced pressure due to the expiry of the shareholder lock-in period. Lock-in periods are common after companies list on the stock market. During this period, early investors such as venture capital funds, promoters, or early shareholders are restricted from selling their shares.
Once the lock-in period ends, these investors become free to sell their holdings in the open market. This can increase the supply of shares, which often leads to downward pressure on stock prices.
The recent developments come shortly after Meesho reported weaker quarterly profitability. For the December quarter, the company posted a net loss of ₹491 crore, significantly higher than the ₹37.4 crore loss reported in the same period a year earlier.
Despite the increase in losses, the company’s revenue continued to grow. Operating revenue for the quarter rose to ₹3,517.6 crore, showing strong demand for its platform. However, expenses increased faster than revenue, which widened the company’s losses.
Meesho continues to expand its business in India’s value-commerce segment. The platform focuses on affordable products and small sellers, particularly in Tier-II and smaller cities.
The company reported strong growth in platform activity. Orders on the platform reached around 690 million, representing a 36% year-on-year increase. Annual transacting users also rose to about 251 million, up 34% compared with last year.
While the tax dispute and lock-in expiry have created short-term pressure on the stock, investors will continue to watch the company’s legal response and financial performance in the coming quarters.