Who are Anchor Investors in an IPO?

Published on: September 03, 2025

As per SEBI ICDR Regulations 2018, an anchor investor is a qualified institutional buyer (QIB) who places a bid of at least Rs 10 crore in a mainboard IPO or Rs 2 crore in an SME IPO during the book-building process. Bidding and allotment of shares for anchor investors happens one day before the IPO opens.

Who are Anchor Investors in IPO?

In Mainboard IPO, the minimum allocation to a single Anchor investor is Rs 5 crores ensuring that only large institute investors can participate. On the other hand, in SME IPO the minimum allocation for 1 anchor investor is Rs 1 crore.

Anchor investors are financial institutions that are allocated shares at usually the upper price band before the IPO is opened to the public.

Increasing interest of anchor investors in IPO:

In recent years, there has been a noticeable surge in the participation of Anchor Investors in IPO, particularly within the SME (Small and Medium Enterprises) segment. Anchor Investors—typically large institutional entities such as mutual funds and QIBs are allotted shares ahead of the public offering. Their early commitment not only provides crucial price discovery and credibility to the issue but also enhances investor confidence across market segments. Anchor Investor participation increases the likelihood of a successful IPO subscription and improved post-listing performance- IPO Advisors for listing.

This table represent the growth of Anchor Investors Interest in SME IPOs:

As seen in table above Anchor investment in SME IPOs rose to 929.47 in FY 24 from 130.97 in FY 23 representing a huge increase.

It is seen that the Anchor investment increased significantly in FY 25 to 2204.35 Cr from 929.47 in FY 24.

The data analysis above indicates the increase in the number of Anchor investors who want to participate in growing companies listing on NSE Emerge or BSE SME. Participation of Anchor investors in SME IPO boosts confidence and builds trust among the retail and other investors.

Explore List of New SME IPOs

Who can be Anchor Investors in an IPO?

Anchor Investors is a category of investors who are allowed to invest in an IPO before it opens to the general public. According to SEBI regulations, only Qualified Institutional Buyers (QIBs) can become Anchor Investors. Other investor categories in Initial Public Offer includes QIB, HNI, Individual Investors (previously called retail investors). Each category has a defined quota and limits as per SEBI ICDR Regulations.

What are the allocation rules for Anchor investors in SME IPO?

In an IPO, the number of anchor investors is determined by the size of allocation in the anchor investors proportion. The following table outlines the minimum and maximum number of Anchor Investors permitted, along with the applicable minimum allotment requirements:

What are the allocation rules for Anchor investors in Mainboard IPO?

In an IPO, the number of anchor investors is determined by the size of allocation in the anchor investors proportion. The following table outlines the minimum and maximum number of Anchor Investors permitted, along with the applicable minimum allotment requirements:

What are the rules for Anchor Investors in IPO (primary market fundraising)?

Key Features of Anchor investors in Initial Public Offer

• Minimum bid of 1 crore in SME IPO and 10 crore in Mainboard IPO.
• Opens for application one day before the IPO opens and allotment happens on the same day.
• QIB (Qualified Institutional Buyers) are eligible for anchor investor category.
• Subject to a lock-in period of 30 days for 50% and 90 days for the remaining 50% of the shares from the date of allotment.
• Anchor investors can receive up to 60% of the QIB share, with one-third (1/3rd) reserved for domestic mutual funds.  Bidding for anchor investors starts one day before the Initial Public Offer opens.  
• Once bids are placed, they cannot be changed or withdrawn.  
• Anchor investors must pay the full bid amount at the time of application.  
• Allocation of shares occurs on the same day as the bid submission.  
• They can apply for up to the total shares offered in the anchor category.  
• Family members, relatives, merchant bankers, and promoters cannot apply as anchor investors.

Top Anchor Investors in SME IPOs in India till date:

Explore List of Anchor Investors on ipoplatform.com

Who are QIB in Initial Public Offer?

Only a QIB can participate in Anchor Investor Category.

The following entities can become Anchor Investors:

1. Mutual Funds
2. Insurance Companies
3. Banks
4. Foreign Portfolio Investors (FPIs)
5. Alternate Investment Funds (AIFs)
6. Pension Funds
7. Provident Funds
8. Public Financial Institutions
9. Multilateral and Bilateral Development Financial Institutions
10. Venture Capital Funds
11. State Industrial Development Corporations
12. Asset Management Companies (AMCs)
13. Systemically Important Non-Banking Financial Companies (NBFCs)
14. Any other QIBs as defined by SEBI

Explore New Mainboard IPOs

What is the Investment Limit for Anchor Investors in Mainboard and SME IPO?

• The minimum bid for anchor investors is Rs 10 crore in Mainboard IPO and Rs 1 crore in SME IPO.  
• Anchor investors can receive up to 60% of the QIB share, with one-third (1/3^rd) reserved for domestic mutual funds.  
• They can apply for the total number of shares available in the anchor investor category.

What is the Lock-in Period for Anchor Investor in Initial Public Offer?

Anchor investors are subject to a lock-in period of 30 days for 50% and 90 days for other remaining 50% of the shares from the date of allotment.

What is the allocation period for the Anchor Investors in IPO?

The IPO offering for anchor investors opens and closes just one day before the IPO launch (IPO open date). They have a single day to submit their bids, with allocations happening that same evening for a swift and efficient process.

List of SME IPOs Listed in 2025

What is the role of anchor investors in IPO?

Anchor Investors play a very important role in the success of an IPO by providing early trust and stability to the offer. Anchor Investor participation in the offer helps in building market confidence, supports price discovery, and attracts other institutional and retail investors to the IPO. 

These are the key roles of Anchor Investors in an IPO:

• It provides early funding support to the IPO.
• It gives boost in public and market confidence in the Initial Public Offer.
• This helps in price discovery before the IPO opens to the public.
• This encourage participation from other investors, especially retail (Individual Investors).
• It helps in adding credibility and reputation to the IPO.
• It also reduces risk of under-subscription for the Issuer company.

Conclusion

Anchor Investors are crucial part of the IPO process, offering early support, credibility, and market confidence to the public offering. Their timely investment not only helps in setting the right price but also attracts other institutional and retail investors to participate. 

By following SEBI’s structured guidelines, Anchor Investors contribute to a smooth and transparent IPO process, ultimately supporting the success of the company going public. List of Anchor investors is available on various IPO related websites like ipoplatform.com