Meesho faces investor protest over anchor allotment to SBI Funds

(Bloomberg) — Meesho Ltd.’s anchor book faced a setback after several large investors pulled out after the Indian e-commerce firm reportedly allocated about a quarter of the shares in that tranche to SBI Funds Management Pvt., the country’s largest asset manager, according to people familiar with the matter.

People who asked not to be identified because the information is confidential said that this decision triggered a reaction from other large funds. Meesho is set to open its anchor book on Tuesday, with some of its shares reserved for institutional investors, ahead of its initial public offering starting Wednesday.

Capital Group, Aberdeen Group Plc, Norges Bank Investment Management, ICICI Prudential Asset Management Co., Nippon India Life Asset Management Ltd are among those who have withdrawn, sources said. and Nomura Asset Management, he said. They added that many of them had demanded allocation of the same amount as SBI Funds and had given up on what was seen as a protest.

Still, Meesho’s core roster includes a number of global investors, including sovereign wealth funds such as GIC Pte and Abu Dhabi Investment Authority, as well as large long-term investors such as Fidelity International, BlackRock Inc., Baillie Gifford, as well as global firms such as WCM Investment Management and Dragoneer Investment Group LLC.

Of course, the anchor allocation process is still ongoing and the final investor roster may change.

The episode underscores the strong demand for India’s tech startups moving towards public listings. UrbanCo. and Billionbrains Garage Ventures Ltd, parent company of discount broker Groww. Recent IPOs from digital platforms, including IPOs, have seen strong demand, reflecting consumers’ rapid shift to online services and commerce.

Representatives for Capital Group and Aberdeen declined to comment. Spokespeople for Meesho, SBI Funds and other investors did not respond to requests for comment.

The Bengaluru-based marketplace, which connects small producers with price-sensitive consumers in India’s smaller cities, aims to raise as much as 54.2 billion rupees ($603 million). According to a newspaper advertisement published on Friday, the price of the shares ranges between Rs 105 and Rs 111.

Existing shareholders, including Elevation Capital V Ltd., Peak XV Partners Investments V and Meesho’s founders, will sell shares in the IPO.