Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce company, Meesho, has been making headlines in recent times, especially with its plans to go public. However, the company has faced a significant setback in its initial public offering (IPO) process. According to reports, Meesho’s anchor book faced investor withdrawals after a significant allocation to SBI Funds Management, prompting other large funds to exit in protest. This development has raised concerns about the company’s ability to attract and retain investors.
The anchor book is a crucial component of the IPO process, where a company allocates a portion of its shares to institutional investors before the IPO opens for public subscription. The anchor investors are typically large institutional investors who are expected to hold onto their shares for a longer period, providing stability to the company’s stock price. However, in Meesho’s case, the allocation to SBI Funds Management seems to have caused a rift among other investors.
Reports suggest that several large funds, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, withdrew from the anchor book in protest. These investors were reportedly unhappy with the significant allocation to SBI Funds Management, which they felt was unfair and biased. The exact reasons behind their withdrawal are not clear, but it is believed that they were expecting a more equitable distribution of shares.
Despite the protest from some investors, Meesho’s IPO lineup still includes several global investors, such as GIC and BlackRock. These investors have committed to investing in the company, which is a positive sign for Meesho’s future prospects. However, the withdrawal of other large funds has raised concerns about the company’s ability to attract and retain investors in the long term.
The controversy surrounding Meesho’s anchor allotment has also sparked a debate about the fairness and transparency of the IPO process in India. Some experts have argued that the allocation of shares to anchor investors should be more transparent and equitable, to avoid such controversies in the future. Others have pointed out that the IPO process is complex and involves many stakeholders, making it difficult to satisfy all investors.
Meesho’s IPO plans have been highly anticipated, given the company’s impressive growth trajectory and its potential to disrupt the Indian e-commerce market. The company has been expanding its operations rapidly, and its valuation has been estimated to be around $10 billion. However, the controversy surrounding the anchor allotment has cast a shadow over the company’s IPO plans, and it remains to be seen how the company will navigate this challenge.
In conclusion, Meesho’s anchor allotment controversy has highlighted the complexities and challenges of the IPO process in India. While the company has managed to attract some global investors, the withdrawal of other large funds has raised concerns about its ability to attract and retain investors. The controversy has also sparked a debate about the fairness and transparency of the IPO process, and it remains to be seen how the company will address these concerns.
As the Indian e-commerce market continues to grow and evolve, companies like Meesho will play a crucial role in shaping the industry’s future. However, they will need to navigate the complexities of the IPO process and address the concerns of investors to succeed in the long term. Meesho’s ability to overcome the current controversy and attract investors will be a key test of its mettle, and it remains to be seen how the company will fare in the coming months.
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