What are anchor investors in an IPO?

Who anchor investors are

Anchor investors are large institutions that commit to an IPO before it opens to the public. They must be qualified institutional buyers (QIBs): mutual funds, insurance companies, pension funds, banks, and registered foreign portfolio investors.

They bid on a single day, the anchor bid day, which is one working day before the IPO opens. The company and its lead managers decide which anchors get shares and how many. This is called discretionary allotment, and it is allowed only in the anchor portion.

Individuals cannot be anchors. Retail and NII investors bid only when the IPO opens.

Why IPOs have anchors

Anchors give an IPO a base of committed demand before the public bids. For the company, that reduces the risk of a weak issue. For other investors, the anchor list is published, so everyone can see which institutions committed money and at what price.

The anchor process also helps set the tone for pricing. Anchors bid at a price within the band, and the final price is announced after the issue closes.

How much anchors can take

In a mainboard IPO, anchors can be allotted up to 60% of the QIB portion. The QIB portion itself is up to 50% of the net issue for a profitable company, and at least 75% for a company that lists without a three-year profit record.

Part of the anchor portion is reserved for domestic long-term investors:

If insurers and pension funds do not take their share, it goes to mutual funds. The change came from SEBI’s 2025 review of the anchor rules, which also changed how many anchors an issue can have at each size.

How many anchors an issue can have

SEBI also limits how many anchors can share the anchor portion, so that it is not given to just one or two investors. Since 30 November 2025:

• An anchor allocation of up to ₹250 crore can be spread across up to 15 anchors, with a minimum allotment of ₹5 crore each.
• For every further ₹250 crore or part of it, up to 15 more anchors can be added, again with at least ₹5 crore each.

The exact limits for each size of issue are in the RHP’s Offer Procedure section.

A large IPO can therefore have dozens of anchors. Several schemes of the same mutual fund house can appear separately in the list.

The anchor price and the final price

Anchors bid at a price within the price band. The final issue price is set only after the public bidding closes.

• If the final price is higher than the anchor price, anchors pay the difference.
• If the final price is lower, anchors still pay their anchor price. They do not get the difference back.

So anchors cannot gain from a lower final price. In practice, the anchor price is usually the upper end of the band.

The lock-in: 30 and 90 days

Anchors cannot sell their shares right after listing. For issues opening on or after 1 April 2022:

1. 50% of anchor shares are locked in for 30 days from the date of allotment.
2. The other 50% are locked in for 90 days from the date of allotment.

After each date, those shares can be sold. Some anchors hold on; others sell. The end of a lock-in can bring more shares to the market, and the price may react. It is a date worth knowing, not a prediction.

A worked example

Take an illustrative mainboard IPO of ₹1,000 crore by a profitable company, with allotment on 30 October 2026. The amounts and dates are our calculation.

For a real IPO, the RHP gives the exact anchor portion, and the anchor allocation announcement gives the investors, the shares and the price.

Where to find anchor details

• The RHP’s Offer Procedure section gives the rules for the anchor portion.
• The anchor allocation announcement is filed with NSE and BSE on the anchor bid day. It lists each anchor, the shares allotted and the price.
• The exchange notices show the anchor bid date. On IPO24by7, each IPO page shows it in the dates timeline. BLS Polymers’ anchor day was 26 October 2026, one working day before it opened on 27 October.

Reading the anchor announcement

The anchor allocation announcement is a table. For each anchor, it shows the name, the number of shares, the share of the anchor portion and the amount, all at the anchor price.

Three things are worth noting from it:

1. The mix of investors. How much went to domestic mutual funds, insurers, pension funds and foreign investors.
2. How concentrated it is. Whether a few names took most of the portion, or it was spread widely.
3. The anchor price. It is usually at the upper end of the band, and it is the price the lock-in shares were bought at.

Anchors in SME IPOs

SME IPOs can also have an anchor portion, taken from the QIB portion. The RHP of each SME issue states whether it has anchors, how much they can take and the lock-in that applies.

Anchors and the QIB subscription figure

The QIB subscription you see during bidding does not include anchors. Anchors are allotted before the issue opens, and the QIB figure counts only the QIB shares left after that.

So a QIB figure of 2x means bidding QIBs asked for twice the shares left for them, on top of the anchor portion. Read how IPO subscription status works.

What anchors can and cannot tell you

They can tell you that some large institutions committed money at a stated price, and which ones.

They cannot tell you what the shares will do after listing. Anchors invest for their own reasons and time frames, and some sell when the lock-in ends. An anchor list is a fact about demand, not a recommendation.

Common mistakes to avoid

• Treating a well-known anchor as an endorsement. It is one investor’s decision for its own portfolio.
• Adding anchors to the QIB subscription. The published QIB figure already leaves them out.
• Ignoring the lock-in end dates. They come 30 and 90 days after allotment, not after listing.
• Assuming anchors always hold. After the lock-in, they are free to sell.
• Reading the anchor price as a fair value. It is the price institutions paid, not an estimate of what the shares are worth.

What to do next

Read about all the investor categories in an IPO and how IPO shares are allotted. To find the anchor rules for a particular issue, use how to read an RHP.

Sources: SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, Schedule XIII on book building, including allocation to anchor investors; SEBI ICDR (Amendment) Regulations, 2022: lock-in of 50% of anchor shares for 30 days and 50% for 90 days, for issues opening on or after 1 Apr 2022; SEBI ICDR amendment notified in November 2025, effective 30 Nov 2025: anchor reservation raised to 40%, one-third for mutual funds and the rest for insurers and pension funds; BLS Polymers and Jio Platforms RHPs (October 2026), for anchor bid dates.

Frequently asked questions