Meesho faces investor protest over anchor allotment to SBI Funds
The Indian e-commerce landscape has been abuzz with the news of Meesho, a social commerce platform, facing investor protest over its anchor allotment to SBI Funds Management. According to reports, Meesho’s anchor book faced significant withdrawals from prominent investors after a substantial allocation was made to SBI Funds Management. This move prompted other large funds to exit in protest, citing concerns over the allotment process.
The anchor book is a crucial component of an initial public offering (IPO), where a company allots shares to institutional investors before the IPO opens for subscription. The anchor investors are typically long-term investors who provide stability to the issue and help set the tone for the IPO. However, in Meesho’s case, the allocation to SBI Funds Management seems to have raised eyebrows among other investors.
Reports suggest that several prominent investors, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, withdrew from Meesho’s anchor book in protest. These investors were allegedly unhappy with the significant allocation to SBI Funds Management, which they felt was not in line with the usual practices of anchor allotments.
Despite the protests, Meesho’s IPO lineup still boasts an impressive array of global investors, including GIC and BlackRock. These investors have reportedly committed to anchor investments in the company, demonstrating their confidence in Meesho’s growth potential.
The controversy surrounding Meesho’s anchor allotment has sparked a debate about the transparency and fairness of the IPO allocation process in India. Some investors have raised concerns that the allocation to SBI Funds Management may have been influenced by factors other than the fund’s investment merit. Others have questioned the lack of transparency in the allocation process, which they feel may have led to favoritism towards certain investors.
Meesho’s decision to allocate a significant portion of its anchor book to SBI Funds Management has also raised questions about the company’s relationship with the fund house. While SBI Funds Management is one of the largest fund houses in India, its allocation in Meesho’s IPO has been seen as unusual by some investors.
The Indian regulatory framework for IPOs is designed to ensure fairness and transparency in the allocation process. The Securities and Exchange Board of India (SEBI) has guidelines in place to prevent favoritism and ensure that allocations are made based on investment merit. However, the controversy surrounding Meesho’s anchor allotment has highlighted the need for greater transparency and accountability in the IPO allocation process.
In recent years, India has seen a surge in IPO activity, with several high-profile issues hitting the market. While the IPO market has provided a platform for companies to raise capital and list their shares, it has also raised concerns about the allocation process and the role of institutional investors.
As Meesho prepares to list its shares on the Indian stock exchanges, the company will need to address the concerns of its investors and demonstrate its commitment to transparency and fairness. The controversy surrounding its anchor allotment has highlighted the importance of building trust with investors and ensuring that the IPO allocation process is seen as fair and transparent.
In conclusion, Meesho’s experience with its anchor allotment serves as a reminder of the importance of transparency and fairness in the IPO allocation process. While the company has managed to attract a strong lineup of global investors, it will need to address the concerns of its investors and demonstrate its commitment to good governance practices. As the Indian IPO market continues to evolve, it is essential that companies and regulators work together to ensure that the allocation process is fair, transparent, and based on investment merit.
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