The Securities and Exchange Board of India (SEBI) has updated the allocation framework for anchor investors in initial public offerings, increasing the anchor-investor reservation from 33% to 40%.

Key Highlights

• SEBI increases IPO anchor investor reservation to 40%, enhancing institutional participation and market stability in primary issuances.
• New SEBI rules under ICDR amendment aim to strengthen IPO book-building transparency and investor confidence across capital markets.

Under the revised guidelines, domestic mutual funds will receive 33% of the anchor portion, while insurers and pension funds are allocated the remaining 7%. If the 7% reserved for insurers and pension funds goes unsubscribed, it will be reallocated to mutual funds.

Also Read: Groww Bags Rs 2,984 Crore from Anchor Investors before IPO Launch

In addition, SEBI has raised the cap on the number of anchor investors allowed in IPOs with anchor portions exceeding ₹250 crore from 10 to 15 anchor investors per ₹250 crore. The regulator also merged the previous Category I (up to ₹10 crore) and Category II (above ₹10 crore up to ₹250 crore) discretionary anchor allocation categories into a single category for issues up to ₹250 crore, with a minimum of 5 and maximum of 15 anchor investors, and a minimum allotment of ₹5 crore each.

These amendments are part of SEBI’s broader efforts to strengthen institutional footing and stability in the IPO market by widening participation of long-term investors. The changes will take effect from 30 November 2025, after amendments to the ICDR (Issue of Capital and Disclosure Requirements) norms.