MUMBAI: Despite the growing concerns and the reported resultant decisions of some institutional investors to quit the Softbank-backed company after the management and not its i–bankers’ decided to allot a disproportionately higher share of the anchor book to SBI Mutual Fund, forcing many others to quit the issue, the Rs 5,422-crore IPO of ecommerce platform Meesho has been fully subscribed on the day one Wednesday.
The issue priced at Rs 95-110 has opened for public subscription today and the retail portion was fully bought within one hour of opening today.
The issue may have also resulted in a steep fall in the grey market premium on the stock, from 44% ahead of the issue to under 40% today.
The Meesho management, led by cofounders Vidit Aatrey and Sanjeev Kumar, has reportedly allotted as much as 25% of its Rs 2,439-crore anchor book to SBI Mutual Fund alone, which is the largest fund house, flagging issues about governance process at the company as also transparency about the issue apart from professional fairness, sources told TNIE. This has also forced some other anchor investors to not to bid on the issue, they added.
The sources said domestic and foreign investors who chose to walk out the issue in protest are ICICI Prudential AMC, Nippon India AMC, and foreign players like Capital Group and Norges Bank Investment Management.
None of them could be contacted for comments, while Meesho did not return calls.
However, Meesho stood its ground. In the final allocation announced late on December 2, SBI MF got shares worth Rs 603 crore, and the second biggest chunk went to GIC of Singapore along with the Monetary Authority of Singapore, worth Rs 200 crore, followed by Fidelity (Rs 148 crore) and BlackRock (Rs 75 crore). Among domestic funds, Axis Mutual Fund was allotted shares for just Rs 48 crore.
It can be noted that IPO allocations have long been a point of friction among institutional investors, but the debate sharpened as demand for Meesho’s anchor book surged, with the tranche oversubscribed nearly 30 times.
Meesho issue of Rs 5,422-crore, comprises a fresh issue of Rs 4,250 crore and an offer-for-sale of about Rs 1,171.20 crore, and the price band is Rs 105–Rs 111. At the upper end of the price band, the IPO values Meesho at roughly Rs 50,096 crore.
The issue has been bought by qualified institutional buyers (0.16x), non-institutional investors (1.26x), retail individual investors (3.15x) and total at 1.01x on day one.