Anchor Investors in an IPO

Who anchor investors are, how much of an issue they can take, the 30-day and 90-day lock-ins, when the anchor allocation is published, and how to read the list before deciding whether to apply.

Published 14 September 2026 · IPO Sahayak

The evening before a mainboard IPO opens, the company announces that it has raised a few hundred crore from anchor investors. The headline is meant to reassure retail applicants, and it often does. The anchor book is genuinely informative — but only if you know who the anchors are, what they are committing to, and what happens 30 and 90 days after listing when their lock-in ends.

Who anchors are and what they get

Anchor investors are qualified institutional buyers — mutual funds, insurance companies, pension funds, foreign portfolio investors, banks — that agree to take a block of the issue before it opens to anyone else. The rules for them sit in SEBI's ICDR regulations and are fairly specific:

• The anchor portion can be up to 60% of the QIB category. In a typical book-built issue with 50% reserved for QIBs, that is up to 30% of the whole offer.
• One third of the anchor portion is reserved for domestic mutual funds, provided they bid for it at or above the anchor price.
• Each anchor must apply for at least ₹10 crore in a mainboard issue; lower thresholds apply for SME issues.
• The number of anchors is capped by the size of the anchor portion — from a maximum of two in a very small anchor book to fifteen per ₹250 crore in a large one, with a minimum of ₹5 crore each.
• Promoters, their relatives and associates, and the lead managers and their associates cannot be anchors (mutual funds sponsored by a lead manager are allowed).

Timing and price

Anchor bidding happens on one working day before the issue opensto the public, and allocation is completed the same day. Anchors bid at a price within the announced band, and their allocation price is disclosed to the exchanges that evening.

The anchor price is not necessarily the final price. If the book-building process discovers a price higher than what anchors paid, they must pay the difference within two days of the allocation of the public portion. If the discovered price is lower, anchors do not get the difference back — they have paid more than everyone else. This asymmetry is the price of being allowed in a day early with a guaranteed allocation. In practice, anchors and the public almost always end up at the cap of the band.

The lock-in

Anchor shares cannot be sold immediately after listing. Since April 2022 the lock-in is split:

• 50% of the anchor allotment is locked in for 30 days from the date of allotment.
• The remaining 50% is locked in for 90 days from allotment.

Both dates are known before the issue opens — count from the allotment date in the issue timetable. They matter because a newly listed stock with a modest free float can see a large block of institutional shares become sellable on a known day. The 30-day expiry in particular has become a date that traders watch. Not every anchor sells — many funds are buying to hold — but the possibility of supply is real, and it is public.

How to read the anchor allocation

The anchor list is filed with the exchanges the evening before the issue opens. It shows every anchor, the shares allotted and the amount. A few things to look for, beyond the headline total:

Who, specifically

Large domestic mutual funds and long-only foreign funds buying through their main schemes are the strongest signal — they are subject to their own investment committees and are buying to hold. A list dominated by names nobody recognises, by funds that appear in every SME anchor book, or by entities that are essentially trading desks, is a weaker signal even if the total is the same.

How concentrated

Fifteen institutions taking ₹20 crore each says something different from two taking ₹150 crore each. Broad participation means many independent committees approved the price; concentration means the book could have been filled by one or two relationships.

Which schemes

Mutual funds allocate through named schemes. A large-cap or flexi-cap fund buying is a different commitment from a thematic or an arbitrage scheme. The scheme name is on the list.

Whether the anchor book was fully taken

Companies almost always fill the anchor portion, because bankers line it up before announcing the issue. An anchor book that is smaller than the maximum allowed, or that closed with fewer participants than expected, is unusual enough to notice.

What the anchor book does and does not tell you

It tells you that a set of professional investors, with access to management and the full RHP, accepted the price band a day early and agreed to hold at least half their shares for three months. That is a real endorsement, and a weak or thin anchor book on a large mainboard issue is genuinely a warning.

It does not tell you the stock will list at a premium. Anchors are buying for a holding period of months or years at a price they consider fair; the grey market is pricing the first day. Issues with strong anchor books have listed flat or below the issue price when the broad market turned in the week between anchor allocation and listing. And anchor demand is partly a function of the relationships the lead managers have — a strong book is evidence of bankers doing their job as well as of the company's merit.

Used with the QIB subscription figure on the final day— which shows whether institutions beyond the anchors wanted the stock at that price — the anchor list is one of the two most useful pieces of institutional evidence a retail applicant can see. On its own it is a headline.

Anchors in SME issues

SME issues on NSE Emerge and BSE SME may have anchor portions too, with lower minimum application sizes. The list is worth reading more sceptically. The same handful of funds and family offices appear across many SME anchor books, and the amounts are small enough that the anchor allocation says less about the business than it does about the lead manager's network. Treat SME anchor headlines as marketing unless the names are ones you would recognise from a mainboard book.

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