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Anchor investors are institutional investors who commit to investing in a company's initial public offering (IPO) before it goes public to provide confidence to other investors.
These
investors typically include Mutual Funds (MFs), Foreign Portfolio Investors
(FPIs), and Insurance companies.
Qualified
Institutional Buyers (QIBs) are a broader category of institutional investors,
including anchor investors. However, anchor investors are specifically
committed to investing in the IPO at a predetermined price.
In
venture capital, an anchor investor is typically a lead investor who commits a
significant amount of capital to a startup's funding round, providing
credibility and attracting other investors.
Anchor investors play a crucial role in an IPO by demonstrating confidence in the company's prospects, which can encourage other investors to participate in the offering.
Anchor
investors help determine the IPO price by placing substantial bids, Thus offers Price Stability.
Anchor investors typically need to meet certain eligibility criteria set by regulatory authorities and the company issuing the IPO. These criteria may include minimum investment requirements and compliance with securities regulations.
According
to SEBI:
-Anchor investors must apply for shares worth at least Rs.5 crores or more.
-The application must be submitted one
day before the issue opens for public subscription.
Information
about anchor investors can be found in the IPO prospectus or offering
documents. These documents are publicly available and provide insights into the
anchor investor list.
Anchor investors must apply for shares worth at least ₹5 crores or more.
Yes, anchor investors may be subject to a lock-in period, during which they are prohibited from selling their shares for a specified duration after the IPO. This period is designed to stabilize the stock price and prevent short-term speculation.
After
allotment, anchor investors are not allowed to sell their shares for at least
30 days.