Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce industry has been abuzz with the news of Meesho’s upcoming initial public offering (IPO). However, the company has recently faced a significant setback after its anchor book allocation sparked protests from several prominent investors. According to reports, Meesho’s decision to allocate a substantial portion of its anchor book to SBI Funds Management led to the withdrawal of several large funds from the IPO lineup.
The anchor book is a critical component of an IPO, as it allows institutional investors to invest in the company before the public offering. The allocation of the anchor book is typically done to attract high-quality investors and provide a vote of confidence in the company’s prospects. However, in Meesho’s case, the allocation to SBI Funds Management seems to have backfired.
Reports suggest that several prominent investors, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, withdrew from the IPO after learning about the significant allocation to SBI Funds Management. These investors were allegedly upset about the preferential treatment given to SBI Funds Management, which they felt was unfair and lacked transparency.
The protest from these investors is significant, as they are among the largest and most respected players in the investment community. Their withdrawal from the IPO lineup is likely to have a negative impact on Meesho’s ability to raise funds and achieve its desired valuation.
Despite this setback, Meesho’s IPO lineup still includes several global investors, such as GIC and BlackRock. These investors have reportedly committed to investing in the company, which is expected to provide a much-needed boost to Meesho’s IPO prospects.
The controversy surrounding Meesho’s anchor book allocation raises important questions about the transparency and fairness of the IPO process in India. The allocation of the anchor book is typically done at the discretion of the company and its investment bankers. However, the lack of transparency and accountability in this process can lead to allegations of favoritism and unfair treatment.
In recent years, the Indian IPO market has witnessed several instances of controversy and protests from investors. The Meesho episode is the latest in a series of incidents that highlight the need for greater transparency and accountability in the IPO process.
Meesho’s decision to allocate a significant portion of its anchor book to SBI Funds Management may have been driven by a desire to attract a high-quality investor with a strong track record. However, the company’s failure to communicate this decision effectively to other investors has led to a loss of trust and confidence among the investment community.
As Meesho moves forward with its IPO plans, the company will need to work hard to regain the trust of investors and demonstrate its commitment to transparency and fairness. The company’s ability to navigate this challenging situation will be closely watched by the investment community and will have significant implications for its future prospects.
In conclusion, Meesho’s IPO plans have hit a roadblock after the company’s anchor book allocation sparked protests from several prominent investors. The withdrawal of these investors from the IPO lineup is a significant setback for Meesho, which will need to work hard to regain their trust and confidence. Despite this challenge, Meesho’s IPO lineup still includes several global investors, which is expected to provide a boost to the company’s prospects. As the company moves forward with its IPO plans, it will be essential to prioritize transparency and fairness to ensure a successful outcome.
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