Archive · 6 Nov 2025
SEBI Increases IPO Anchor Investor Quota to 40%
Imagine companies selling small pieces of themselves, called shares, for the first time in a big sale called an IPO.
Before the public can buy, a special group called anchor investors get to buy some shares first.
The stock market police, SEBI, want more local investors like mutual funds and insurance companies to be part of this special group.
So, they are making the special group bigger, allowing them to buy more shares (40% instead of 33%).
They are also letting more investors be part of this special group if the IPO is large.
If the shares set aside for insurance and pension funds aren't fully bought, they will be given to mutual funds instead.
This aims to encourage long-term investors to participate more in IPOs.
SEBI has increased the total reservation for anchor investors in IPOs from 33% to 40%.
The 40% anchor book is divided into 33% for mutual funds and 7% for insurers and pension funds.
Any unsubscribed portion of the 7% reserved for insurers and pension funds will be reallocated to mutual funds.
The number of anchor investors allowed for IPOs with an anchor portion over ₹250 crore has increased from 10 to 15.
For every additional ₹250 crore or part thereof, an additional 15 investors can be permitted, with a minimum allotment of ₹5 crore per investor.
- Who
- Securities and Exchange Board of India (SEBI)
- What
- Amended rules to increase the total reservation for anchor investors in IPOs to 40% and expand the number of permitted anchor investors.
- When
- Rules amended effective from November 30, 2025.
- Where
- India's IPO market.
- Why
- To broaden the participation of domestic institutional investors like mutual funds, insurance companies, and pension funds.
SEBI's Proposed Changes
Existing Framework
Anchor Investor Allocation
SEBI's Proposed Changes
Total reservation increased to 40% (33% for MFs, 7% for insurers/pension funds).
Existing Framework
Total reservation was 33%.
Investor Limit for IPOs > ₹250 Crore
SEBI's Proposed Changes
Maximum of 15 investors allowed for allocations up to ₹250 crore. Additional investors permitted for every ₹250 crore increment.
Existing Framework
Maximum of 10 investors previously allowed.
Discretionary Allotment Categories
SEBI's Proposed Changes
Categories I (up to ₹10 crore) and II (₹10-₹250 crore) merged into a single category for allocations up to ₹250 crore (min 5, max 15 investors).
Existing Framework
Separate categories for discretionary allotment existed.
- Regulator
- Securities and Exchange Board of India (SEBI)
- Rule Change
- Amended share-allocation framework for anchor investors in IPOs.
- New Anchor Book Size
- 40% of IPO size
- Breakdown
- 33% for mutual funds, 7% for insurers and pension funds
- Unsubscribed Insurer/Pension Fund Portion
- Reallocated to mutual funds
- Investor Limit Adjustment
- Increased from 10 to 15 investors for IPOs with anchor portion > ₹250 crore.
- Additional Investor Limit
- 15 additional investors for every ₹250 crore or part thereof
- Minimum Allotment per Investor
- ₹5 crore
Sources
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Sebi expands IPO anchor book size to 40% to broaden institutional investors participation
