According to several individuals with knowledge of the situation, Meesho’s management — rather than its merchant bankers — decided to grant SBI Mutual Fund an unusually large portion of its Rs 2,439-crore anchor book.
The development signals a notable change in India’s IPO landscape, where issuers are more frequently interacting directly with potential investors long before the offering, discussing pricing and allotment, and at times disregarding bankers’ advice. It has also highlighted that the lack of a defined standard for fairness in anchor allocations allows for subjective decisions, sparking disputes among institutional investors over what is considered a fair distribution in an often non-transparent process.
The decision triggered an unusual division among major investors. Capital Group, Norges Bank Investment Management, ICICI Prudential Mutual Fund, and Nippon India Mutual Fund declined participation in the anchor book, dissatisfied with the size of the allocation given to SBI MF. According to a senior executive from the nation’s second-largest fund house, the choice to withdraw stemmed from concerns about setting a precedent: although they rank among India’s leading asset managers, the allocation proposed to them was significantly smaller than that offered to the largest domestic fund house.
According to individuals aware of the matter, Meesho allocated roughly Rs 600 crore to SBI MF in the anchor tranche, while ICICI Prudential MF was offered only about Rs 100 crore — a disparity described as significant. The company declined to alter the allocation, citing an earlier promise to SBI MF and the importance of honoring that commitment, the sources said.
Meesho maintained its position. In the final allocation disclosed late on December 2, SBI Mutual Fund secured Rs 603 crore. The next highest allocation, amounting to Rs 200 crore, went jointly to GIC and the Monetary Authority of Singapore, followed by Fidelity with Rs 148 crore and BlackRock with Rs 75 crore. Among domestic investors, Axis Mutual Fund — ranking second after SBI MF — received only Rs 48 crore.
According to Meesho insiders, several factors contributed to the large allocation. SBI Mutual Fund had informed the company about its pricing and quantity preferences well before the anchor book opened, providing early certainty for building the order book. The fund also expressed readiness to continue purchasing shares during the main IPO and post-listing, provided the price stayed at or below the offer level. Additionally, sources noted SBI MF’s strong track record, highlighting its history of investing in new-age firms and maintaining long-term holdings, in contrast to investors who view IPOs as short-term trades.
Sources familiar with SBI Mutual Fund’s IPO strategy indicated that the fund house adopts a highly selective approach, conducting extensive research on potential companies more than six months ahead of time and clearly stating its position on pricing and allocation well before the book-building phase. In this way, SBI MF acts as a genuine anchor investor rather than waiting to assess overall market sentiment. Once satisfied with an IPO’s valuation, the fund is prepared to invest during the main book and post-listing, even if the share price falls below the offer level. This readiness to support stability is valued by many issuers, particularly in an environment where technology IPOs often face substantial sell-offs after listing, leading to increased volatility.
Institutional investors have continued to clash over IPO share allocations, but friction intensified as demand for Meesho’s anchor book surged, with subscriptions approaching 30 times the available shares. Analysts caution, however, that such headline numbers may not accurately reflect genuine investor appetite. Because anchor investors are not required to commit funds at the bidding stage, many place large orders simply to stay competitive, expecting to receive only a small allocation if the issue is oversubscribed.
Meesho’s initial public offering will be open from December 3 to December 5, 2025. The total issue size is estimated at around Rs 5,421.20 crore, including a fresh share issuance worth Rs 4,250 crore and an offer-for-sale of approximately Rs 1,171.20 crore. The price range is set between Rs 105 and Rs 111 per share, with a face value of Re 1. At the highest price point, Meesho’s valuation stands at about Rs 50,096 crore. The shares are scheduled to list on both the BSE and NSE on December 10, 2025.
