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 faced a significant setback after its anchor book allocation sparked protests from several large investors. According to reports, Meesho’s decision to allot a significant portion of its anchor book to SBI Funds Management prompted other prominent funds to withdraw their investments in protest.
The anchor book is a critical component of an IPO, as it allows institutional investors to purchase shares before the offering is made available to the public. The allocation of the anchor book is typically done to attract high-profile investors and generate interest in the IPO. However, in Meesho’s case, the allocation to SBI Funds Management has raised eyebrows among other investors.
Several large funds, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, have withdrawn their investments from Meesho’s IPO in protest. These investors had initially expressed interest in participating in the anchor book but were allegedly dismayed by the significant allocation to SBI Funds Management.
The protest by these investors is seen as a significant blow to Meesho’s IPO plans. The company had been hoping to attract a diverse range of investors to participate in its public offering, but the controversy surrounding the anchor book allocation has raised concerns about the IPO’s prospects.
Despite the setback, Meesho’s IPO lineup still includes several prominent global investors, such as GIC and BlackRock. These investors have reportedly committed to purchasing shares in the IPO, which is expected to be one of the largest in the Indian e-commerce sector.
The controversy surrounding Meesho’s anchor book allocation has sparked a debate about the allocation process in Indian IPOs. Some investors have expressed concerns that the process is not transparent and can be influenced by factors such as relationships between the company and the investors. Others have argued that the allocation process is fair and is based on the investors’ track record and investment appetite.
Meesho’s decision to allot a significant portion of its anchor book to SBI Funds Management has also raised questions about the role of domestic investors in Indian IPOs. SBI Funds Management is one of the largest asset managers in India, and its participation in Meesho’s IPO is seen as a significant endorsement of the company’s prospects.
However, the protest by other investors has highlighted the challenges faced by Indian companies in attracting a diverse range of investors to participate in their IPOs. The controversy surrounding Meesho’s anchor book allocation has also sparked concerns about the potential impact on the company’s valuation and the overall success of the IPO.
In conclusion, Meesho’s IPO plans have faced a significant setback due to the controversy surrounding the anchor book allocation to SBI Funds Management. While the company still has a strong lineup of global investors, the protest by other prominent funds has raised concerns about the IPO’s prospects. The controversy has also sparked a debate about the allocation process in Indian IPOs and the role of domestic investors in the market.
As the Indian e-commerce sector continues to grow and evolve, companies like Meesho will face increasing scrutiny from investors and regulators. The success of Meesho’s IPO will depend on its ability to attract a diverse range of investors and demonstrate a strong track record of growth and profitability.
For now, Meesho’s IPO plans remain on track, despite the controversy surrounding the anchor book allocation. The company is expected to launch its IPO in the coming months, and investors will be watching closely to see how the offering performs.
About the Author
