SEBI expands IPO anchor book to 40% to boost institutional participation
- IBEF
- November 7, 2025
The Securities and Exchange Board of India (SEBI) has revised the framework for share allocation to anchor investors in initial public offerings (IPOs) to encourage greater participation from domestic institutional investors, including mutual funds, insurance firms, and pension funds. As per the new rules, the overall reservation for the anchor portion has been raised to 40% from the earlier 33%, comprising 33% for mutual funds and 7% for insurers and pension funds. SEBI stated that if the 7% quota for insurers and pension funds remains unsubscribed, it will be reallocated to mutual funds.
The regulator has also expanded the number of anchor investors for IPOs with anchor portions above Rs. 250 crore (US$ 28.2 million), increasing the limit from 10 to 15 per Rs. 250 crore (US$ 28.2 million). A minimum of five and a maximum of 15 investors will be permitted for allocations up to Rs. 250 crore (US$ 28.2 million), and for every additional Rs. 250 crore (US$ 28.2 million) or part thereof, an extra 15 investors will be allowed, with a minimum allotment of Rs. 5 crore (US$ 5,64,079.42) per investor. Further, Sebi has merged Category I - up to Rs. 10 crore (US$ 1.13 million), and Category II - above Rs. 10 crore (US$ 1.13 million) up to Rs. 250 crore (US$ 28.2 million) into a single category for allocations up to Rs. 250 crore (US$ 28.2 million). The new framework, which takes effect from November 30, 2025, aims to strengthen the participation of long-term institutional investors and improve transparency in IPO allocations.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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