Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce industry has been witnessing a significant surge in recent years, with several companies gearing up to go public through initial public offerings (IPOs). One such company is Meesho, a social commerce platform that has been making headlines with its plans to raise funds through an IPO. However, the company’s anchor book has faced a setback after a significant allocation to SBI Funds Management, prompting other large funds to exit in protest.
According to reports, Meesho’s anchor book had initially seen a strong response from investors, with several large funds showing interest in the company’s IPO. However, when the anchor allocation was announced, it was revealed that SBI Funds Management had been allocated a significant chunk of the shares. This move did not go down well with other large funds, who felt that the allocation was unfair and biased towards SBI Funds Management.
As a result, several large funds, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, among others, withdrew from the anchor book in protest. This development has raised concerns about the IPO process and the allocation of shares to anchor investors.
Despite the withdrawal of these large funds, Meesho’s IPO lineup still includes several global investors, such as GIC and BlackRock. These investors have shown faith in the company’s growth potential and are expected to play a significant role in the IPO.
The controversy surrounding the anchor allocation has sparked a debate about the IPO process and the role of anchor investors. Anchor investors are typically large institutional investors who are allocated shares in an IPO before the issue opens to the public. They are expected to provide stability to the issue and help to set the tone for the IPO.
However, the allocation of shares to anchor investors has always been a contentious issue. There have been instances where anchor investors have been allocated shares at a lower price than the issue price, raising concerns about fairness and transparency.
In the case of Meesho’s IPO, the allocation of a significant chunk of shares to SBI Funds Management has raised questions about the company’s relationship with the fund house. While SBI Funds Management is a reputable fund house, the allocation of shares to it has been seen as unfair by other large funds.
The withdrawal of large funds from the anchor book is a setback for Meesho’s IPO plans. However, the company is still expected to go ahead with the issue, given the interest shown by global investors like GIC and BlackRock.
The Meesho IPO is significant not only for the company but also for the Indian e-commerce industry as a whole. The company’s success will be closely watched by other e-commerce players who are planning to go public in the near future.
In conclusion, the controversy surrounding Meesho’s anchor allocation is a reminder of the challenges faced by companies when they go public. The allocation of shares to anchor investors is a critical aspect of the IPO process, and companies must ensure that it is done in a fair and transparent manner.
As the Indian e-commerce industry continues to grow and evolve, it is essential that companies prioritize fairness and transparency in their IPO processes. This will not only help to build trust among investors but also ensure that the industry as a whole continues to attract investment and grow.
The Meesho IPO is a significant development in the Indian e-commerce industry, and its success will be closely watched by investors and industry players. While the controversy surrounding the anchor allocation is a setback, it is not expected to derail the IPO plans.
As the company moves forward with its IPO plans, it is essential that it prioritizes fairness and transparency in the allocation of shares to anchor investors. This will not only help to build trust among investors but also ensure that the company’s IPO is a success.
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