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Nomura issues reduce rating on Meesho shares

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Date
Company
Meesho
What it does
E-commerce platform for value products
Kind
News
Stage
Public
Sector
Commerce & Consumer Brands

What they do

Meesho operates an asset-light e-commerce marketplace connecting mass-market consumers with small and medium businesses using an internal logistics platform

What happened

Brokerage house Nomura initiated coverage on the company with a reduce rating and set a target price of 167 rupees

Why it matters

Nomura highlighted rich valuations compared to rivals, potential competition from Amazon and Flipkart, and overlapping pressure from quick-commerce firms

The details

  • Brokerage firm Nomura initiated research coverage on Meesho with a Reduce rating.
  • Nomura set a target price of ₹167 per share, representing a downside of 24% to 28% from recent prices.
  • Shares of Meesho fell as much as 5.4% in intraday trading to a low of ₹220.40 following the note.
  • The brokerage stated that Meesho trades at a significant premium relative to peers like Eternal and Swiggy.
  • Separately, broker Centrum identified Meesho as a candidate for inclusion in the MSCI India Global Standard Index.
  • Centrum noted Meesho sits at 3.54 times the MSCI size cutoff buffer due to strong stock performance.

The bigger picture

  • Meesho completed its stock market listing in December 2025 at an issue price of ₹111.
  • The share price has more than doubled from its initial public offering price and gained 23% in 2026.
  • Competitors like Flipkart with Shopsy and Amazon with Amazon Bazaar are targeting value commerce.
  • Quick-commerce platforms are broadening offerings into non-grocery segments, creating overlap in major cities.

About the business

  • Meesho operates a two-sided marketplace connecting price-sensitive consumers with small and medium businesses.
  • The platform reaches approximately 90% of total online shoppers across India.
  • The company uses an asset-light model and does not hold inventory or physical warehouses.
  • Monetization occurs through seller advertising fees and fulfilment services rather than sales commissions.
  • The platform relies on its Valmo logistics system, partnering with roughly 18,000 third-party logistics partners.
  • Artificial intelligence models are used across the platform to personalize user experience and expand engagement.

What happens next

  • Nomura projects net merchandise value to grow at a 23% compound annual rate between FY27 and FY30.
  • Advertising revenue is expected to increase to 5% of net merchandise value by FY30.
  • Adjusted operating margins are expected to rise to 2.9% by FY30 from negative 1.2% in FY27.

The deal

Type
brokerage coverage

Founders

  • Vidit Aatrey, Founder
  • Sanjeev Barnwal, Founder

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