Sebi also proposes the expansion of the framework for anchor investors by increasing the number of anchor -all -out of problems above £ 250 crore, making broader foreign fund participation possible. | Photocredit: Hemanshi Kamani/Reuters
The Securities and Exchange Board of India (Sebi) proposed changes on Thursday to the allocation structure of large initial public offers (IPOs), including increasing the share assigned to institutional buyers and the reduction of the share assigned to retail investors.
The supervisor has proposed to reduce the share of retail to 25 percent of 35 percent in a graded way for large IPOs, while for QIBs it can be increased to 60 percent of 50 percent.
The supervisor said that although the average size of IPOs has increased in recent years, “direct retail participation has remained flat in the past three years.” In large public issues, the retail subscription levels are particularly filled in, said Sebi, who invite public comments before August 21.
Anchor Investor Pool to expand for larger IPOs
To encourage a broader institutional participation, Sebi has also proposed to expand the framework of the Anchor Investor Framework. For IPOs with anchor allocations above £ 250 crore, the number of permitted anchor investors -all -offsis can be increased, a step aimed at facilitating participation by foreign portfolio investors who manage multiple funds.
Sebi also advised, including insurance companies and pension funds in the reserved category of the part of the anchor investors, in addition to investment funds. It suggested raising the reservation for life insurers, pension funds and domestic investment funds from 30 percent to 40 percent of the anchor book. A third of these would remain reserved for investment funds, while 7 percent would be carved for insurers and pension funds.
Published on July 31, 2025
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