BofA Securities initiated coverage on newly listed e-commerce firm Meesho on Monday with a Neutral rating and a price target of ₹190.00 per share. The brokerage identified emerging monetisation drivers in advertising and logistics while maintaining a measured stance on valuation following the stock's significant post-IPO performance. Meesho shares fell 5% on Monday to ₹162.10, following a 3% rise on Friday after three consecutive sessions of decline.

Key Monetisation Drivers Identified

BofA highlighted two primary areas driving Meesho's monetisation strategy. The brokerage flagged advertising as a crucial revenue driver, noting the company's strategic shift from a cost-per-click (CPC) model to a return-on-investment-based approach.

According to BofA's analysis, sellers faced significant challenges under the CPC model as the average seller in India didn't fully understand the CPC product, and ad spending didn't lead to conversions. The new ROI-based approach is preferred by merchants as it delivers more outcome-driven results. The brokerage noted that Meesho's advertising engine follows the GMVmax model used by platforms such as TikTok Shop and Shopee.

Logistics Strategy Focuses on Cost Efficiency

Logistics emerged as the second key monetisation driver in BofA's assessment. The brokerage emphasised Meesho's ability to serve value-focused users efficiently through continued efforts to reduce logistics costs. The company prioritises keeping logistics costs low for sellers rather than extracting profits from its logistics network, enabling sellers to offer a wider range of affordable products.

Stock Performance Since Market Debut

Despite Monday's decline, Meesho shares continue trading well above their IPO price. The stock performance since listing shows significant volatility following initial market enthusiasm.

Meesho made its stock market debut on December 10, listing at ₹162.00, representing a 46% premium to the IPO price, and closed the first trading session near ₹170.00, marking a 53% gain. The company's IPO, valued at over ₹5,000 crores, was subscribed 79 times overall, with retail investors alone bidding 19 times the shares on offer.

Market Transition from Listing Enthusiasm

BofA's coverage initiation marks a shift in market focus from listing-driven momentum to fundamental analysis of the company's operating performance and business model sustainability. The Neutral rating and ₹190.00 price target reflect a balanced assessment of the stock's risk-reward profile at current levels. While the brokerage acknowledged structural drivers in advertising and logistics, the measured rating indicates caution as investors recalibrate expectations following the initial market enthusiasm surrounding one of the most closely watched recent listings.

Meesho shares experienced a significant decline on January 12, 2026, hitting the 5% lower circuit at ₹163.85 per share, down from the previous close of ₹170.60. The e-commerce platform's stock touched a low of ₹162.10 during the trading session, reflecting continued market volatility following the company's recent listing performance. With a current market capitalisation of ₹73,947 crores, the decline comes amid two key developments affecting investor sentiment.

Lock-in Period Expiry Impact

The primary catalyst for today's decline was the recent expiry of Meesho's one-month shareholder lock-in period. This development has made approximately 109.9 million shares available for trading in the market, representing around 2% of the company's total equity. While the lock-in expiry does not guarantee immediate selling pressure, it provides existing shareholders with the flexibility to trade their holdings, contributing to increased market supply.

BofA Securities Coverage Initiation

BofA Securities has officially initiated coverage on Meesho with a 'Neutral' rating and established a target price of ₹190 per share. This target represents a potential upside of approximately 16% from current trading levels. The brokerage highlighted Meesho's strategic positioning to capitalize on India's value-focused mass market segment, which remains a significant growth opportunity in the country's expanding e-commerce landscape.

The investment bank projects robust growth metrics for the company, with net merchandise value (NMV) expected to grow at a compound annual growth rate of 26% between FY26 and FY29. Additionally, BofA forecasts a notable improvement in operational efficiency, with adjusted EBITDA projected to turn positive at 3% by FY29, compared to an expected negative 3% in FY26.

Strategic Growth Opportunities

BofA identified several strategic factors that could support Meesho's future expansion. The company is well-positioned to gain additional market share in India's competitive e-commerce space through its focus on value-conscious consumers. The brokerage also highlighted potential growth drivers including the scaling of fintech offerings to enhance customer and seller services, and expansion into the grocery segment, which represents a rapidly growing category in Indian e-commerce.

Recent Financial Performance

As of September 30, 2025, Meesho reported total income of ₹5,857.70 crores, demonstrating the scale of its operations. The company showed signs of improved cost management with losses narrowing to ₹700.70 crores during the period. However, EBITDA losses stood at ₹551.90 crores, indicating continued near-term operating challenges. Total assets declined to ₹6,640.40 crores from ₹7,226.10 crores in March 2025.

The combination of lock-in period expiry and analyst coverage initiation has created a mixed sentiment around Meesho's stock. While the immediate trading pressure reflects typical post-listing adjustments, the positive long-term projections from BofA suggest underlying business strength in India's evolving e-commerce market.