BofA highlighted Meesho’s shift in its advertising model and its approach to logistics as key elements shaping the company’s longer-term outlook. At the same time, the Neutral rating signals caution as the stock transitions from listing-driven momentum to closer scrutiny of execution and valuation.
Shares of Meesho fell as much as 5% on Monday to Rs 162.10. The decline followed a 3% rise on Friday, after the stock had slipped for three consecutive sessions.
Ads and logistics emerge as key levers
BofA flagged advertising as an important monetisation driver, noting Meesho’s move away from a cost-per-click (CPC) model towards a return-on-investment-based approach. According to the report, sellers faced challenges under the CPC model as the “average seller in India didn’t fully understand the CPC product” and ad spends “didn’t lead to conversions.”
By contrast, the brokerage said merchants prefer ROI-based advertising, which is “more outcome-driven.” BofA noted that Meesho’s ad engine is along the lines of the “GMVmax” model used by platforms such as TikTok Shop and Shopee, adding that the shift has led to a consistent increase in ad revenues.
Logistics was identified as the second monetisation driver. BofA said Meesho’s ability to serve value-focused users efficiently stems from its continued efforts to reduce logistics costs. The brokerage noted that Meesho prioritises keeping logistics costs low for sellers rather than extracting profits from its logistics network, a strategy that allows sellers to offer a wider range of affordable products.
Stock still well above IPO price
Despite Monday’s decline, Meesho shares continue to trade well above their IPO price. The stock is up about 46% from its issue price of Rs 111, though it has slipped 36% from its post-listing peak of Rs 254. Meesho shares are down about 8% so far in 2026.
The company made its stock market debut on December 10, listing at a premium to its issue price and closing 53% higher on the first day of trade. The stock debuted at Rs 162, a 46% premium to the IPO price, and ended its first session near Rs 170.
Meesho’s Rs 5,000-crore-plus IPO was subscribed 79 times overall, with retail investors alone bidding 19 times the shares on offer, reflecting strong demand at the time of listing.
From debut enthusiasm to coverage-led scrutiny
Since its debut, Meesho’s shares have seen sharp swings as early enthusiasm has given way to profit-taking and reassessment. BofA’s initiation brings the focus back to the company’s operating levers and the sustainability of its business model as a listed entity.
While the brokerage highlighted structural drivers in advertising and logistics, its Neutral rating and Rs 190 target underscore a balanced view on the stock’s risk-reward at current levels, as investors recalibrate expectations following one of the market’s most closely watched recent listings.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)