Meesho is facing investor protests over anchor allocation to SBI Funds

The anchor book of Meesho Ltd. suffered a setback after several major investors pulled out when the Indian e-commerce company reportedly allocated about a quarter of the shares in this tranche to SBI Funds Management Pvt., the country’s largest asset manager, according to people familiar with the matter.That decision prompted a pushback from other major funds, said the people, who asked not to be identified because the information is private. Meesho will open its anchor book – a portion of shares reserved for institutional investors – on Tuesday ahead of its initial public offering that opens on Wednesday.

Among those who withdrew were Capital Group, Aberdeen Group Plc, Norges Bank Investment Management, ICICI Prudential Asset Management Co., Nippon India Life Asset Management Ltd. and Nomura Asset Management, the people said. Many had sought allocations similar to that of SBI Funds and opted out in what was seen as a protest, they added.Read more: Meesho IPO: GMP of 38% ahead of Dec 3 opening, signals strong listing sentiment

Still, Meesho’s anchor set includes several global investors, including sovereign wealth funds such as GIC Pte and Abu Dhabi Investment Authority, in addition to large long-only investors such as Fidelity International, BlackRock Inc., Baillie Gifford, as well as global firms such as WCM Investment Management and Dragoneer Investment Group LLC, the people said.

To be fair, the anchor allocation process is still ongoing and the final investor lineup could change.

The episode underlines the intense demand for Indian tech startups as they move towards public listings. Recent IPOs of digital platforms including Urban Co. and Billionbrains Garage Ventures Ltd. – the parent company of discount broker Groww – have attracted 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 the other investors did not respond to requests for comment.

The Bengaluru-based marketplace, which connects small manufacturers with price-sensitive consumers in smaller Indian cities, aims to raise as much as 54.2 billion rupees ($603 million). The shares are priced in a range of Rs 105 to Rs 111 each, according to a newspaper advertisement published on Friday.

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