source:-Business Today
Meesho Ltd., an Indian e-commerce company, opened subscriptions for its highly anticipated initial public offering (IPO) on Wednesday Meesho Ipo . The company hopes to raise up to ₹5,420 crore in what will be one of the most closely watched listings of the year. The SoftBank-backed online marketplace is known for connecting small manufacturers and sellers with value-driven consumers in India’s non-metro areas. It has set a price range of ₹105 to ₹111 per share.
The launch comes after a rough round of anchor book allocation on Tuesday, which added a dramatic twist to an otherwise strong debut. Even though there was a lot of stress, the company was able to raise ₹2,440 crore through the anchor placement, giving 125 institutional investors 219.78 million shares.
Anchor Allocation Causes Stress for Global Funds
On the night before the IPO, the company and a few big global funds had a rare public disagreement. Bloomberg reports that several well-known investors dropped out of the anchor process because Meesho’s allocation strategy didn’t meet their expectations. The flashpoint came when Meesho Ipo gave SBI Funds Management Pvt., one of India’s biggest asset managers, about a quarter of the anchor allocation
Some international institutions reportedly pushed back against this move because they thought there would be a more diverse distribution. Anchor rounds usually have a lot of interest and not much controversy, but Meesho’s choice to put SBI Funds first seems to have upset some people. This shows how competitive the market is for a piece of India’s rapidly growing digital commerce pie.
The final list of anchor investors is still very impressive. Meesho Ipo book, along with SBI Funds, caught the attention of big global investors like the Abu Dhabi Investment Authority, Fidelity International, BlackRock Inc., Baillie Gifford, WCM Investment Management, and Dragoneer Investment Group.
A High-Growth Marketplace Puts a Lot of Money on India’s Value Economy
Meesho was started with the goal of making online shopping more accessible to everyone. It has since become one of India’s fastest-growing digital marketplaces. Its platform has found a niche by helping small manufacturers and resellers in Tier 2, Tier 3, and rural areas reach millions of buyers looking for cheap goods.
Investors are paying more and more attention to the company’s operational discipline, even though it hasn’t yet made a profit at the net level. Analysts point out that Meesho has had positive free cash flow for two years in a row. This is a big deal because many other consumer-internet companies are still having trouble with cash burn.
The company is going public at a time when India’s e-commerce market is getting smaller and the competition is getting tougher. Meesho has been able to attract a wide range of value-conscious customers, especially in markets where prices are important, by focusing on low-cost categories like clothing, beauty, accessories, and household goods.
Brokerages Sound Positive
Before the public offering, most domestic brokerage firms have said they are confident in Meesho’s long-term future. SBI Securities told people to buy into the IPO at the higher end of the price range because the company’s financial numbers are getting better and its business model is focused on users.
The brokerage said that even though Meesho Ipo had net losses after exceptional items, its ability to consistently generate free cash flow is a good sign of long-term growth. Analysts also said that the company’s large network of sellers, growing market share, and efficient operating structure were strategic advantages that could help create value over the long term.
The Meesho Ipo Market in India
Meesho Ipo offering gives India’s busy IPO market a boost. Investors are eager to buy, and the economy is growing steadily. With big domestic companies and well-known global investors interested, even though there are disagreements about how to divide the shares, the listing is expected to get a lot of attention in the coming days.
The subscription window will stay open all week, and the final price will depend on how many people want to invest. If Meesho Ipo listing goes well, it could not only show that India’s capital markets are strong, but it could also mark the start of a new phase in the growth of homegrown e-commerce companies that want to find long-term ways to grow.
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