New Delhi: The Securities and Exchange Board of India (Sebi) has revamped the share-allocation framework for anchor investors in IPOs to broaden participation from domestic institutional investors such as mutual funds, insurance firms, and pension funds.
Under the revised norms, the anchor portion in IPOs has been increased to 40 per cent of the institutional investor quota, up from 33 per cent earlier. Of this, 33 per cent will be reserved for mutual funds and 7 per cent for insurers and pension funds. If the 7 per cent portion remains unsubscribed, it will be reallocated to mutual funds, Sebi said in a notification issued on October 31.
The regulator also raised the number of anchor investors allowed for IPOs with anchor portions above Rs 250 crore, increasing the limit from 10 to 15 investors for every Rs 250 crore. For each additional Rs 250 crore (or part thereof), another 15 investors will be permitted, with a minimum allotment of Rs 5 crore per investor.
Further, Sebi has merged two anchor investor categories—Category I (up to Rs 10 crore) and Category II (Rs 10 crore to Rs 250 crore)—into a single bracket for allocations up to Rs 250 crore, maintaining a minimum of five and a maximum of 15 anchor investors.
The updated framework, effective November 30, is part of Sebi’s effort to enhance long-term institutional participation and diversify IPO investor bases.
Meanwhile, Sebi Chairperson Tuhin Kanta Pandey addressed concerns about lofty IPO valuations, clarifying that the regulator will not intervene in pricing matters.
“We don’t determine valuations — that’s up to investors,” he said, noting that market forces should freely set prices based on demand and opportunity.
His remarks follow market discussions around Lenskart’s Rs 7,200-crore IPO, which some analysts consider aggressively priced.