SEBI Overhauls Anchor Investor Framework to Boost Domestic Participation in IPOs

Sebi has revised its IPO share allocation rules for anchor investors to enhance domestic institutional investor participation. It increased anchor portion reservations to 40 per cent and raised the allowable number of investors, while merging allocation categories to streamline investments. The changes take effect on November 30.

In a bid to enhance domestic institutional investor involvement, the Securities and Exchange Board of India (Sebi) has revamped the share allocation framework for anchor investors in initial public offerings (IPOs).

The regulatory body increased the total reservation in the anchor portion to 40 per cent, with 33 per cent for mutual funds and 7 per cent for insurers and pension funds. Unsubscribed segments for insurers and pension funds will now be allocated to mutual funds, as per Sebi's notification dated October 31.

Furthermore, Sebi raised the number of anchor investors allowed for IPOs above Rs 250 crore from 10 to 15 per Rs 250 crore, facilitating broader participation. The revised framework merges previously separate investor categories to optimize the allocation process and comes into force on November 30.

(With inputs from agencies.)