Meesho Enters Logistics Business Through New Subsidiary Incorporation
Meesho announces entry into logistics business through new subsidiary incorporation with ₹1.00 lakh share capital, focusing on goods movement and storage services via third-party providers. BofA Securities initiates neutral coverage with ₹190.00 price target, citing logistics as key monetization driver. Stock trades 46% above ₹111.00 IPO price despite 36% decline from ₹254.00 peak.
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Meesho has announced its strategic entry into the logistics business through the incorporation of a new subsidiary, marking a significant expansion of the e-commerce platform's operations. The company disclosed this development in a regulatory filing on January 12, outlining its plans to establish a logistics-focused entity.
New Subsidiary Details
The newly incorporated subsidiary will operate with specific logistics-focused objectives as outlined by Meesho:
| Parameter: | Details |
|---|---|
| Share Capital: | ₹1.00 lakh |
| Primary Business: | Logistics service provider |
| Core Services: | Goods movement, loading, unloading, storage |
| Service Model: | Third-party service providers |
The main objects of the subsidiary include engaging in logistics services for goods movement and undertaking activities related to loading, unloading, in-transit storage, handling, and trans-shipment of goods through third-party service providers. Meesho has not yet disclosed the subsidiary's name, stating that a separate disclosure will be made upon incorporation.
Analyst Coverage and Market Position
BofA Securities has initiated coverage on the newly-listed e-commerce firm with notable observations about the company's strategic direction:
| Coverage Details: | Information |
|---|---|
| Rating: | Neutral |
| Price Target: | ₹190.00 per share |
| Upside Potential: | 14% |
| Key Driver: | Logistics monetization |
The brokerage identified logistics as a key monetization driver, noting that Meesho's ability to serve value-focused users efficiently stems from its consistent efforts to reduce logistics costs. The company's strategy focuses on keeping logistics costs low for sellers rather than extracting profits from its logistics network, enabling sellers to list a wider range of affordable products.
Stock Performance Analysis
Meesho's shares continue to demonstrate strong performance relative to their initial public offering:
| Performance Metric: | Value |
|---|---|
| IPO Price: | ₹111.00 |
| Current Premium: | +46% |
| Post-listing Peak: | ₹254.00 |
| Decline from Peak: | -36% |
| 2025 Performance: | -8% |
The stock made its market debut on December 10, listing at ₹162.00, representing a 46% premium to the IPO price, and closed its first trading session near ₹170.00, marking a 53% gain on the debut day.
IPO Success and Market Reception
Meesho's initial public offering demonstrated exceptional market demand with impressive subscription metrics. The ₹5,000.00 crore-plus IPO was subscribed 79 times overall, with retail investors alone bidding 19 times the shares on offer, reflecting strong investor confidence at the time of listing.
BofA Securities highlighted the company's shift in advertising model and logistics approach as key elements shaping Meesho's longer-term outlook, while maintaining a neutral stance as the stock transitions from listing-driven momentum to execution-focused evaluation.
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