Meesho faces investor protest over anchor allotment to SBI Funds
In a surprising turn of events, Meesho, a popular Indian e-commerce company, has faced a significant backlash from investors over its anchor allotment to SBI Funds Management. According to reports, Meesho’s anchor book was met with investor withdrawals after a substantial allocation was made to SBI Funds Management, prompting other large funds to exit in protest. This unexpected development has raised eyebrows in the investment community, with many wondering what led to this decision and its implications for Meesho’s initial public offering (IPO).
The anchor book is a crucial component of an IPO, where a company allots shares to institutional investors before the public offering. This is done to gauge interest and build momentum for the IPO. In Meesho’s case, the anchor book was oversubscribed, with many prominent investors showing interest. However, the allocation to SBI Funds Management seemed to have upset some of the other investors, leading to a wave of withdrawals.
Among those who withdrew their investments were Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, along with several other prominent funds. This exodus of investors is a significant blow to Meesho’s IPO plans, as these funds were expected to play a crucial role in the company’s listing. The reasons behind their withdrawal are not entirely clear, but it is speculated that the allocation to SBI Funds Management was seen as unfair or biased.
Despite this setback, Meesho’s IPO lineup still includes some notable global investors, such as GIC and BlackRock. These investors have shown confidence in Meesho’s business model and growth potential, which is a positive sign for the company. However, the loss of other prominent investors may impact the IPO’s overall valuation and success.
The incident raises questions about the allocation process and the role of anchor investors in an IPO. Anchor investors are typically allocated a significant portion of the shares, and their participation is seen as a vote of confidence in the company. However, the allocation process can be complex, and companies must balance the interests of multiple investors. In this case, Meesho’s decision to allocate a substantial portion to SBI Funds Management seems to have backfired, leading to a protest from other investors.
Meesho’s IPO plans have been highly anticipated, with the company aiming to raise significant capital to fuel its growth plans. The company has been expanding its operations rapidly, and the IPO is seen as a crucial step in its journey. However, the investor protest over the anchor allotment to SBI Funds Management has introduced an element of uncertainty, and it remains to be seen how this will impact the IPO’s outcome.
In conclusion, Meesho’s anchor allotment to SBI Funds Management has sparked a controversy, leading to a protest from other investors. While the company still has a strong lineup of global investors, the loss of prominent funds may impact the IPO’s valuation and success. The incident highlights the complexities of the IPO process and the need for companies to balance the interests of multiple investors. As Meesho moves forward with its IPO plans, it will be interesting to see how the company addresses the concerns of its investors and navigates this challenging situation.
About the Author
