Meesho shareholders approve Rs 4,250 crore primary fundraise via IPO

Vidit Aatrey, co-founder and CEO, Meesho

The shareholders of Meesho, an e-commerce startup, have approved the company’s proposal to raise Rs 4,250 crore ($500 million) in primary capital  through an initial public offering (IPO), regulatory filings showed.

The company, which plans to raise a total of around Rs 8,500 crore ($1 billion) through a mix of primary capital and an offer for sale (OFS) component, will file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming weeks under the confidential route, Moneycontrol had reported earlier.

To be sure, the final size of the issue will be decided only closer to the date of filing its DRHP.

At the same time, Meesho’s investors including Elevation Capital, Peak XV Partners, Prosus and SoftBank, at the company’s extraordinary general meeting in Bengaluru also approved a management change.

Co-founder and CEO Vidit Aatrey was also designated as the chairman, managing director and CEO of the company.

Moneycontrol had also reported that Meesho has rejigged its board in the run up to its IPO. 

Sarthak Misra, Partner at SoftBank Investment Advisers, which holds under 10 percent in Meesho and Ashutosh Sharma, India Head - Investments and M&A at Prosus Ventures, an investor with 12 percent stake in the company, have given up their board seats as part of the restructuring, two of the persons cited above said.

While Prosus and SoftBank together holding a stake of around 22 percent in Meesho may seem significant, their share in the company is relatively lower than the total ownership of Elevation Capital and Peak XV Partners, the largest two investors in the e-commerce startup, put together.

To be sure, Peak XV Partners, which holds a 12.5 percent stake in the company, will continue to have its representative, Mohit Bhatnagar, Managing Director, Peak XV Partners on Meesho’s board along with Mukul Arora, Co-Managing Partner at Elevation Capital, the single largest shareholder with an ownership of 13.5 percent in Meesho.