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 recently faced a setback after its anchor book faced investor withdrawals. The reason behind this withdrawal is a significant allocation to SBI Funds Management, which has prompted other large funds to exit in protest. Despite this, Meesho’s IPO lineup still includes global investors like GIC and BlackRock.
According to reports, several prominent investors, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, among others, have withdrawn from Meesho’s anchor book. This move is seen as a protest against the significant allocation to SBI Funds Management. The anchor book is a crucial component of an IPO, as it provides a sense of stability and confidence to other investors. The anchor investors are typically large institutional investors who are allocated shares before the IPO opens to the public.
The allocation to SBI Funds Management has raised eyebrows among other investors, who feel that the allotment was disproportionate. SBI Funds Management is a significant player in the Indian mutual fund industry, and its allocation in Meesho’s anchor book has been seen as a favorable treatment. This has led to a perception that the allocation process was not fair and transparent, prompting other investors to withdraw from the anchor book.
The withdrawal of prominent investors like Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management is a significant setback for Meesho. These investors are known for their rigorous research and due diligence, and their participation in the anchor book is seen as a vote of confidence in the company. Their exit from the anchor book may raise questions about Meesho’s valuation and growth prospects.
Despite this setback, Meesho’s IPO lineup still includes several global investors like GIC and BlackRock. These investors have a strong track record of investing in Indian companies, and their participation in Meesho’s IPO is seen as a positive sign. GIC, for example, is a significant investor in Indian companies like Flipkart and Zomato, while BlackRock has invested in companies like Paytm and Byju’s.
Meesho’s IPO is expected to be one of the largest in the Indian e-commerce industry, with the company seeking to raise over $1 billion. The company has grown rapidly in recent years, with its revenue increasing by over 100% in the last fiscal year. Meesho’s business model is focused on social commerce, where it connects sellers with buyers through social media platforms like Facebook and Instagram.
The company’s growth prospects are seen as strong, driven by the increasing adoption of e-commerce in India. The Indian e-commerce industry is expected to grow to over $100 billion in the next five years, driven by the increasing demand for online shopping. Meesho’s focus on social commerce and its strong logistics network are seen as key strengths, which will help the company to capitalize on this growth opportunity.
In conclusion, Meesho’s anchor book has faced investor withdrawals after a significant allocation to SBI Funds Management. Despite this, the company’s IPO lineup still includes global investors like GIC and BlackRock. The withdrawal of prominent investors like Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management is a significant setback, but Meesho’s growth prospects remain strong. The company’s focus on social commerce and its strong logistics network are seen as key strengths, which will help the company to capitalize on the growth opportunity in the Indian e-commerce industry.
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