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 is expected to be one of the largest in the country’s history. However, the company has faced a significant setback after its anchor book faced investor withdrawals due to a significant allocation to SBI Funds Management. This move has prompted other large funds to exit in protest, as reported by various sources.
The anchor book is a crucial component of an IPO, as it allows institutional investors to purchase shares before the offering is made available to the public. The allocation of these shares is typically done to attract large, reputable investors who can help stabilize the stock price and provide a vote of confidence in the company. However, in Meesho’s case, the allocation to SBI Funds Management has raised eyebrows among other investors.
According to reports, several prominent investors, including Capital Group, Aberdeen Group, ICICI Prudential Asset Management, and Nippon India Life Asset Management, have withdrawn from Meesho’s anchor book in protest. These investors had initially expressed interest in participating in the IPO but pulled out after learning about the significant allocation to SBI Funds Management.
The reason behind this protest is not entirely clear, but it is believed that the investors were unhappy with the large allocation to SBI Funds Management, which they felt was unfair. The allocation is reported to be around 20-25% of the total anchor book, which is significantly higher than what other investors received. This has led to concerns among investors that the allocation process was not transparent and that SBI Funds Management received preferential treatment.
Despite this setback, Meesho’s IPO lineup still includes several global investors, such as GIC and BlackRock. These investors have committed to purchasing shares in the company, which is expected to be listed on the stock exchanges soon. The inclusion of these prominent investors is a significant vote of confidence in Meesho’s business model and growth prospects.
Meesho is an e-commerce company that specializes in selling products through social media platforms, such as Facebook, Instagram, and WhatsApp. The company has gained significant traction in recent years, with its user base growing exponentially. Meesho’s business model is based on a social commerce platform, where sellers can create their own online stores and sell products to customers.
The company’s IPO is expected to be one of the largest in India’s history, with Meesho seeking to raise around $1 billion from the offering. The IPO is expected to be used to fund the company’s expansion plans, including increasing its user base and improving its logistics and supply chain infrastructure.
The controversy surrounding Meesho’s anchor allotment to SBI Funds Management is a significant setback for the company, but it is not expected to derail the IPO entirely. The company’s strong business fundamentals and growth prospects are still expected to attract investors, despite the protest from some prominent funds.
In conclusion, Meesho’s IPO has hit a roadblock after its anchor book faced investor withdrawals due to a significant allocation to SBI Funds Management. While this setback is significant, the company’s IPO lineup still includes several global investors, such as GIC and BlackRock. The controversy surrounding the anchor allotment is a reminder of the importance of transparency and fairness in the IPO process. As Meesho prepares to list on the stock exchanges, it will be interesting to see how the company navigates this challenge and whether it can still achieve its fundraising goals.
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