Meesho’s decision to allocate a disproportionately large share of its Rs 2,439-crore anchor book to SBI Mutual Fund was made by the company’s management — not its merchant bankers — according to multiple stakeholders familiar with the matter.
The call reflects a growing shift in India’s IPO market, with issuers increasingly engaging directly with prospective investors well ahead of the offer, negotiating on price and quantity and, in some cases, overruling banker recommendations. The episode has also exposed how the absence of any framework for “fairness” in anchor allocation leaves room for subjective judgments, creating a multi-sided disagreement among institutional investors over what constitutes equitable distribution in a largely opaque process.
The move set off a rare split among large investors. Capital Group, Norges Bank Investment Management, ICICI Prudential Mutual Fund and Nippon India Mutual Fund opted out of the anchor book, unhappy with the scale of allocation granted to SBI MF. A senior executive at the country’s second-largest fund house said the decision to walk away was driven by fears of setting a precedent: despite being among India’s biggest asset managers, the proposed allocation offered to them was far smaller than that of the largest domestic fund house.
People familiar with the discussions said Meesho offered SBI MF about Rs 600 crore in the anchor tranche, compared with just Rs 100 crore for ICICI Prudential MF — a gap described as “yawning.” The company refused to revise the split, citing a prior commitment made to SBI MF and the need to uphold that assurance, the people said.
Meesho stuck to its stance. In the final allocation announced late on December 2, SBI MF received Rs 603 crore. The next largest bucket went to GIC and the Monetary Authority of Singapore together, at Rs 200 crore, followed by Fidelity with Rs 148 crore and BlackRock with Rs 75 crore. Among domestic funds, Axis Mutual Fund — the second-largest after SBI MF — was allotted just Rs 48 crore.
Sources close to the company cited several reasons for the outsized allocation. SBI MF had communicated both price and quantity well in advance of the anchor opening, giving the company early clarity to build the book, they said. The fund also conveyed its willingness to remain a buyer during the main IPO and after listing at or below the offer price. Another key factor, according to people close to the company, was SBI MF’s track record: the fund house has been an active investor in new-age companies and typically holds positions for long periods, unlike investors who treat IPOs as near-term trading opportunities.
People familiar with SBI Mutual Fund’s IPO investment approach said the fund house is highly selective about the offerings it participates in, conducting deep research on companies more than six months in advance and communicating its stance on price and quantity well before book building begins. In that sense, they said, SBI MF effectively plays the role of a true anchor — not a follower waiting to gauge broader market sentiment. Once comfortable with the IPO valuation, the fund is also willing to buy in the main book and after listing, even if the stock trades below the offer price. That willingness to provide stability is a comfort many issuers value at a time when tech IPOs often see significant exits after listing, exposing them to heightened volatility.
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. Yet, market participants say headline oversubscription figures often mask the true level of interest. Anchor investors aren’t required to deposit funds while bidding, prompting many to place large demands simply to stay in the race, knowing they will receive only a small fraction if the issue is crowded.
Meesho’s IPO opens December 3, 2025 and runs through December 5. The public issue is worth approximately Rs 5,421.20 crore, comprising a fresh issue of Rs 4,250 crore and an offer-for-sale of about Rs 1,171.20 crore. The price band has been fixed at Rs 105–Rs 111 per share (face value Re 1). At the upper end of the price band, the IPO values Meesho at roughly Rs 50,096 crore. The listing is expected on December 10, 2025 on both BSE and NSE.
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