Japanese technology and investment conglomerate SoftBank is set to offload a 1.5% stake in the Indian e-commerce platform Meesho today through a significant block deal. The transaction involves SoftBank's special purpose investment vehicle and subsidiary, SVF II Meerkat DE, which intends to sell approximately 7 crore shares.
The shares are being offered at a floor price of ₹205 each, representing a 3% discount to Meesho's current market price. This strategic move is expected to generate up to ₹1,435 crore (approximately $170 million) for SoftBank. Financial giants Bank of America (BofA) and JP Morgan are reportedly managing the deal.
Details of the Block Deal
Prior to this sale, SVF II Meerkat DE held an 8.60% stake in Meesho as a public shareholder. The block deal will significantly reduce SoftBank's holding in the value commerce platform. On Wednesday, preceding the deal announcement, Meesho's shares closed 3.12% higher at ₹211.70, bringing the company's market capitalization to ₹97,880 crore.
Meesho's Recent Financial Performance
Meesho has demonstrated improving financial health recently. In the first quarter, the company reported a substantial 54% year-on-year reduction in its net loss, bringing it down to ₹132.8 crore, compared to a loss of ₹289.4 crore in the same period last year. Revenue from operations also saw robust growth, climbing 48% year-on-year to ₹3,712.8 crore.
Despite these positive financial trends, the e-commerce firm has faced mixed signals from market analysts. Around a week ago, CLSA (Credit Lyonnais Securities Asia) initiated coverage on Meesho with an 'Underperform' rating, setting a target price of ₹150. This implied a potential downside of approximately 28% from the stock's price of ₹207 as of August 27.