Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce industry has been abuzz with the news of Meesho’s initial public offering (IPO), which has been making headlines for all the right and wrong reasons. In a recent development, Meesho’s anchor book has faced investor withdrawals after a significant allocation to SBI Funds Management, prompting other large funds to exit in protest. This move has raised eyebrows among investors and has sparked a debate about the allocation process in the IPO.
According to reports, Meesho’s anchor book had allocated a significant portion of its shares to SBI Funds Management, which did not go down well with other large investors. As a result, several prominent investors, 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 exodus of investors has raised questions about the allocation process and the criteria used to select anchor investors.
Despite the protests, Meesho’s IPO lineup still includes several global investors, such as GIC and BlackRock, which is a testament to the company’s strong fundamentals and growth potential. However, the controversy surrounding the anchor allotment has cast a shadow over the IPO, and it remains to be seen how it will impact the overall response to the issue.
The anchor book is a critical component of an IPO, as it provides a platform for institutional investors to invest in the company before the issue opens to the public. The anchor book is typically allocated to a select group of investors, who are chosen based on their investment track record, reputation, and ability to provide long-term support to the company. In Meesho’s case, the allocation to SBI Funds Management was seen as a departure from the usual practice, as it was perceived to be a favoritism towards a domestic investor.
The protests from other investors are understandable, given the significant allocation to SBI Funds Management. The anchor book is meant to provide a level playing field for all investors, and any perception of favoritism can lead to a loss of confidence among other investors. The fact that several prominent investors have withdrawn from the anchor book in protest is a clear indication that the allocation process was not seen as fair and transparent.
Meesho’s IPO is one of the most highly anticipated issues in recent times, and the company has been working hard to create a buzz around it. The company has been expanding its operations rapidly, and its growth prospects are considered to be strong. However, the controversy surrounding the anchor allotment has raised questions about the company’s governance and allocation processes.
The incident has also sparked a debate about the role of anchor investors in an IPO. Anchor investors are meant to provide stability and support to the issue, but they are also expected to be allocated shares in a fair and transparent manner. The fact that Meesho’s anchor book has been marred by controversy has raised questions about the criteria used to select anchor investors and the allocation process.
In conclusion, Meesho’s IPO has been making headlines for all the right and wrong reasons. While the company’s growth prospects are strong, the controversy surrounding the anchor allotment has raised questions about the allocation process and the criteria used to select anchor investors. The protests from other investors are understandable, and it remains to be seen how the company will address these concerns. Despite the controversy, Meesho’s IPO lineup still includes several global investors, which is a testament to the company’s strong fundamentals and growth potential.
As the IPO market continues to evolve, it is essential to ensure that the allocation process is fair, transparent, and free from any perception of favoritism. The incident highlights the need for greater transparency and accountability in the IPO process, and it is hoped that the regulatory authorities will take note of these concerns and take necessary steps to address them.
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