The upcoming initial public offering (IPO) of Meesho has quickly become one of the most discussed public issues in the market. The company is set to open its three-day IPO on December 3. Ahead of the official opening of the company for bidding, the sharp jump in its grey market premium (GMP) has put it on every investor’s radar.
Let’s take a look at the key factors every investor need to watch out for ahead of the opening –
Meesho IPO: What is driving the grey market buzz?
GMP is one of the biggest talking points when an IPO is about to hit the market. For this issue, the latest data from the unlisted market shows Meesho’s shares changing hands at Rs 146, which is nearly 32% above the upper end of the official price band of Rs 111.
However, it is important to note that GMP is not the official listing price and may fluctuate based on the market sentiment.
Meesho IPO: Price band of the issue
The price band of the issue is set between the range of Rs 105 to Rs 111 per share. The offer is structured to raise Rs 5,421 crore at the upper limit, with a mix of a fresh issue and an offer for sale.
Meesho IPO: Fresh issue stays large, while OFS gets trimmed
The fresh issue component of Rs 4,250 crore remains unchanged from earlier plans. However, the offer for sale, where existing shareholders sell part of their stake has been sharply reduced. Instead of the initially planned 17.57 crore shares, shareholders will now sell 10.55 crore shares. This brings the estimated OFS value to around Rs 1,172 crore.
Meesho IPO: Who is selling shares in the offer for sale?
Several early backers will be offloading part of their holding in the offer for sale. These include Elevation Capital, Peak XV Partners, Venture Highway entities, Y Combinator Continuity, Sarin Family India, and others. Some of the founders are also selling a portion, though they will continue to hold large stakes after the issue.
Meesho IPO: Lot size, categories and how the bidding is divided
For investors planning to apply, the minimum application size has been fixed at 135 shares. Like most large IPOs, the division of the offer follows the standard rule: at least 75 percent is reserved for Qualified Institutional Buyers (QIBs), up to 15 percent for Non-Institutional Investors (NIIs), and up to 10 percent for retail participants.
Meesho IPO: Key dates every investor should track
The IPO will open on December 3 and close on December 5. Allocation of shares is expected on December 8, and refunds for those who don’t receive shares may begin on December 9. Shares are likely to reach demat accounts on the same day. The tentative listing on the stock exchanges is scheduled for December 10. Anchor investors, that is, typically large institutional players will participate a day earlier, on December 2.
Meesho IPO: How founders and early shareholders stand to benefit
One of the interesting angles in this IPO is the sharp jump in the value of founder stakes. Co-founder Vidit Aatrey holds over 47 crore shares, acquired at an extremely low average cost years ago. At the upper band of the IPO price, the value of his stake crosses Rs 5,200 crore. Early investors who came in during the initial rounds are also expected to see large paper gains after the listing.
Meesho IPO: Lead managers and registrar
Kotak Mahindra Capital Company is handling the book-running and overall coordination of the offer. Kfin Technologies will act as the registrar responsible for allotment and investor records.
