After installing Stash using the installer, user needs to manually rename the dll files to make the service work.
rename tomcat7.exe tomcat7.exe.x86
rename tcnative-1.dll tcnative-1.dll.x86
rename tomcat7.exe.x64 tomcat7.exe
rename tcnative-1.dll.x64 tcnative-1.dll

In system event logs, it just display only: "The Atlassian Stash service terminated with service-specific error Incorrect function."

After renaming the files the service works fine.