(Bloomberg) — Meesho Ltd., an Indian e-commerce platform, is set to debut in Mumbai on Wednesday in a closely watched listing that will gauge investor appetite after a string of blockbuster tech IPOs.
The SoftBank Group Corp.-backed firm raised 54.2 billion rupees ($603 million) in its initial public offering that was fully subscribed on the first day of book building. It sold shares at 111 rupees apiece, the top of their marketed range, valuing the company at about $5.6 billion. The shares were quoted in the grey market at 35% above the issue price on Tuesday, according to IPOWatch.in.
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Meesho’s debut comes amid a rush by Indian companies to raise funds in the primary market, making India the fourth-biggest IPO venue in the world this year. The deals have surpassed last year’s peak, and the demand is particularly intense for tech startups, a segment investors see as critical to India’s growth.
Online marketplace Urban Co. and Billionbrains Garage Ventures Ltd., the parent of India’s top discount broker Groww, surged on their listing. Eyewear retailer Lenskart Solutions Ltd., however, had a volatile opening, triggering a debate about lofty valuations.
About half of the 333 firms listed so far this year are trading below their offer price, according to data compiled by Bloomberg. A strong debut for Meesho may help ease any concerns about India’s hot IPO market.
Meesho runs a marketplace which connects small manufacturers with value-conscious consumers across India’s smaller cities. Its IPO was subscribed more than 79 times despite a dramatic anchor allocation round that saw several major funds walk away, Bloomberg News reported earlier this month.
The company, which became an India e-commerce heavyweight by selling Temu-like low-priced offerings, plans to deploy some of the proceeds to penetrate smaller towns in one of the world’s biggest consumer markets. It has drawn customers by selling trendy clothes with dresses priced as low as $4.
The Bengaluru-headquartered firm reported a loss of 39.4 billion rupees on revenue of about 94 billion rupees for the year ended March. Investors have largely shrugged off losses at listing-bound startups’ in recent years, focusing on their growth potential.
–With assistance from Rajesh Mascarenhas.
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