SEBI study finds anchor investors exit smaller IPOs faster

When a company sells its shares to the public for the first time, it is called an IPO.

Big investors, called anchor investors, get to buy some shares before everyone else.

They promise to hold those shares for a while, which is called a lock-in period.

Once the waiting time ends, they are allowed to sell.

A group in India called SEBI studied what these investors do after the lock-in ends.

They found that anchor investors sell shares from small IPOs much faster than from big IPOs.

For example, within one year they had sold about 72 out of every 100 shares they bought in small IPOs.

For big IPOs, they had sold only about 41 out of every 100.

Foreign investors sold the most, while mutual funds kept more of their shares.

This study tells us how big investors behave after buying into newly listed companies.