Anchor Investor in IPO: Allocation Rules, Price, Lock-in and What Retail Investors Should Read Into It

An anchor investor in IPO deals is a qualified institutional buyer that puts in a large commitment one working day before the public issue opens. SEBI’s Issue of Capital and Disclosure Requirements (ICDR) framework lays down how that works. The allocation is discretionary. It is capped as a share of the qualified institutional buyer (QIB) book, part of it is set aside for domestic mutual funds, life insurers and pension funds, the price can’t undercut the final offer price, and the shares are locked in on a 30-day / 90-day split. For retail investors the anchor book is a useful read on institutional interest, and also very easy to over-read. We stick here to what the regulations and a current prospectus actually say.

If you’re still getting a feel for the overall IPO process, our pillar on IPO investing in India is the place to start. For the lock-in calendar that kicks in after allotment, see IPO lock-in period explained.

Who counts as an anchor investor in IPO allocations

Under SEBI’s ICDR Regulations, an anchor investor is a qualified institutional buyer that applies for at least ₹10 crore in a mainboard public issue made through book building, or at least ₹2 crore in an issue under the SME chapter of the same regulations. You’ll find the definition in Regulation 2(1)(c) of the draft ICDR chapters published by SEBI, and current offer documents repeat it.

People often confuse two size numbers here. The minimum application for a mainboard anchor is ₹10 crore. Schedule XIII of the ICDR Regulations, separately, sets a minimum allotment of ₹5 crore per anchor investor once allocation is decided. When SEBI rewrote the allottee-count rules in its ICDR (Third Amendment) Regulations, 2025, it kept that ₹5 crore minimum allotment in place.

Anchors don’t use the ASBA / UPI route that retail and most other applicants go through. They bid with the book running lead managers. SEBI’s General Information Document for Investing in Public Offers (GID) says anchor investors can’t withdraw or lower their bids once the anchor bid period is over, and that they pay the bid amount at the time they submit the bid.

How much of the QIB portion anchors can take

In a book-built issue, the issuer can allocate up to 60% of the portion available for QIBs to anchor investors. The ceiling comes from Regulation 32(3) of the ICDR Regulations, summarised in SEBI’s own chapters PDF and in every recent RHP. Whatever is left of the QIB book after the anchor cut, usually called the net QIB portion, is what other QIBs bid into while the public offer is open.

In rupee terms, that 60% depends on how big the QIB category is to begin with:

• In a typical mainboard book-built IPO under Regulation 6(1), QIBs get not more than 50% of the net offer, and anchors can take up to 60% of that.
• Under Regulation 6(2), the route for issuers that don’t meet the profitability / net-worth tests in Regulation 6(1), QIBs must get not less than 75% of the net offer. Anchors can still take up to 60% of this bigger QIB bucket.

So “60%” always means 60% of the QIB portion, never 60% of the whole IPO. If someone says an issue is “60% anchored” and doesn’t tell you the QIB base, the statement is incomplete.

Regulation 32 also keeps a separate 5% mutual-fund allocation, on a proportionate basis, inside the net QIB portion after anchors. Don’t confuse that 5% with the mutual-fund reservation inside the anchor book itself. That one comes next.

Up to 60% of the QIB portion can go to anchors — but that is a share of the institutional bucket, not of the entire IPO size.

Anchor investor in IPO reservation for mutual funds, life insurers and pension funds

Until late 2025, Schedule XIII set aside one-third of the anchor portion for domestic mutual funds, subject to demand. SEBI’s September 2025 board memorandum on ease of doing business relating to anchor allocation pointed out that life insurance companies and pension funds had no reserved slot in the anchor book at all, even though they are long-horizon domestic institutions.

The one-third rule was replaced by the Gazette notification of the ICDR (Third Amendment) Regulations, 2025 (F. No. SEBI/LAD-NRO/GN/2025/271, published 31 October 2025). Its English text says the regulations take effect on the 30th day after publication in the Official Gazette. Schedule XIII, Part A, paragraph (10) now reserves forty per cent of the anchor investor portion like this:

• 33.33% of the anchor portion for domestic mutual funds; and
• 6.67% of the anchor portion for life insurance companies and pension funds.

If the life-insurance / pension-fund slot is under-subscribed, the shortfall can go to domestic mutual funds. The notification defines a life insurance company as one registered with IRDAI under the Insurance Act, 1938, and a pension fund as one registered with PFRDA under the PFRDA Act, 2013.

Watch the base for these percentages. The 33.33% and 6.67% are slices of the anchor investor portion, which is itself up to 60% of the QIB portion. They are not slices of the whole issue. Together they form the mandatory 40% domestic reservation inside the anchor book. The remaining 60% of the anchor book is open to other eligible QIBs, foreign portfolio investors included, depending on demand and on how the issuer chooses to allocate.

How many anchors can get shares, and the minimum ticket

The Third Amendment also rewrote the allottee-count ladder in Schedule XIII. For a mainboard book-built issue, here is where it stands now:

• Allocation up to ₹250 crore: at least 2 and at most 15 anchor investors, with a minimum allotment of ₹5 crore each.
• Allocation above ₹250 crore: at least 5 and at most 15 investors for the first ₹250 crore, plus an additional 15 investors for every additional ₹250 crore or part thereof, again with a ₹5 crore minimum allotment each.

SEBI’s board memo gives the reasoning. The old Category I (up to ₹10 crore, maximum two investors) had fallen out of use as mainboard IPOs got bigger, and the old rule allowed only 10 extra investors for each additional ₹250 crore tranche beyond the first ₹250 crore. Lifting that add-on to 15 was meant to widen the book while keeping the ₹5 crore floor intact.

Within those caps, who gets how much is discretionary. The issuer decides, in consultation with the BRLMs. Retail and non-institutional investors in the public offer get a proportionate or lottery-based allotment instead, so the two processes work very differently.

Anchor bidding day, allocation price and the price-difference rule

Anchors bid on their own day. Current RHPs say the Anchor Investor Bid/Offer Period shall be one working day prior to the Bid/Offer Opening Date, as the SEBI ICDR Regulations require. Anchor allocation is wrapped up that day, and then the public offer opens to retail, NIIs and the rest of the QIB book.

Two pricing rules sit side by side:

• Under Regulation 30 of the ICDR Regulations, in a book-built issue the price offered to anchor investors shall not be lower than the price offered to other applicants.
• The GID covers the cash settlement when the final offer price differs from the anchor allocation price. If the offer price comes in higher than the anchor allocation price, anchors pay the difference by the pay-in date on a revised CAN. If it comes in lower, the extra amount anchors already paid is not refunded.

Put simply, anchors can never get the shares cheaper than the public book does, and if the final price lands below what they paid, they eat the gap. Because of that one-way rule, a fully subscribed anchor book at the top of the price band says more about institutional conviction than a book filled only at the floor. It still doesn’t guarantee a listing pop.

Anchors bid a day early, cannot get a cheaper price than other applicants, and do not get a refund if the final offer price lands below what they paid.

Anchor lock-in: half for 30 days, half for 90 days

Anchors can’t sell everything on listing day. Following SEBI’s December 2021 board decision, rolled out for issues opening after the staggered 2022 dates, the lock-in on anchor allotments was split into two clocks. SEBI’s April 2022 board memorandum records it: lock-in of 90 days on 50% of the shares allotted to anchor investors from the date of allotment, and lock-in of 30 days on the remaining 50%.

Today’s prospectuses carry the same split. It is shorter than the promoter minimum-contribution lock-in, and shorter than the six-month lock-in that generally covers other pre-IPO shareholders under Regulation 17. That’s why the 30-day and 90-day unlock dates matter for supply around and after listing. Our guide on the IPO lock-in period lays the anchor clock out next to the promoter and pre-IPO rules.

A live example: how a current RHP describes the anchor book

The red herring prospectus of Zetwerk Manufacturing Businesses Limited (fetched from the issuer’s published RHP) is a handy template for the post-amendment wording. The RHP sets out these dates:

• Anchor investor bidding date: Wednesday, 14 October 2026
• Bid/Offer opens: Thursday, 15 October 2026
• Bid/Offer closes: Monday, 19 October 2026

The RHP also says the company, in consultation with the BRLMs, may allocate up to 60% of the QIB portion to anchors. Of that anchor portion, 40% is reserved, split as 33.33% for domestic mutual funds and 6.67% for life insurance companies and pension funds, and any shortfall in the insurer/pension slot can go to domestic mutual funds. On lock-in, it repeats that 50% of the equity shares allotted to anchors are locked for 90 days from allotment and the rest for 30 days. The fresh issue in that RHP adds up to as much as ₹28,300 million (₹2,830 crore).

A Livemint report dated 10 October 2026 said more than 30 foreign and domestic investors were weighing the Zetwerk anchor book. It named interest from ADIA, Norges Bank and the asset-management arms of Goldman Sachs, SBI and HDFC, among others, at a valuation of about ₹27,000 crore. Interest isn’t allotment, though. Until the anchor CAN is out, names in a news report are a sign of demand and nothing more. For the issue dates and price band as shown to applicants, Zerodha’s IPO page for Zetwerk lists a ₹143–₹151 band, a ₹5,012 crore issue size and a lot of 99 shares for the 15–19 October 2026 window. We wrote about the issue earlier at Zetwerk IPO.

What strong anchor demand tells a retail investor, and what it doesn’t

A full or oversubscribed anchor book usually means big QIBs were ready to lock up money at a price that can’t undercut the public offer, for at least 30 days on half the shares and 90 days on the rest. That helps price discovery, lowers the risk of a thin institutional book, and leaves a cleaner residual QIB portion for the days the issue is open. How much domestic mutual funds, insurers and pension funds take inside the reserved 40% also says something about long-only domestic appetite. That’s exactly why SEBI widened the reservation in 2025.

Here’s what it doesn’t tell you:

• It isn’t a listing-gain forecast. Anchors are locked in, while retail can sell on day one. Their incentives and holding periods are different.
• You can’t reverse-engineer a discretionary allocation from one headline. The issuer and BRLMs pick the book within SEBI’s caps. A well-known name in a rumoured book is not the same thing as a disclosed allotment.
• The anchor price only means something once you know both numbers. Since anchors can’t pay less than other applicants, a book filled at the cap is a stronger signal than one filled at the floor. Grey-market chatter about either price is no substitute for the RHP and the exchange filings.
• The 30-day unlock is a supply event you can see coming. Half the anchor shares can come to market a month after allotment, and the other half at 90 days. If you’re trading a new listing, plan around those dates.
• The category maths matter. In a Regulation 6(2) issue where QIBs hold at least 75% of the net offer, a “fully anchored” 60% of that QIB book is a much bigger rupee commitment than 60% of a 50% QIB book. Always ask, 60% of what?

A quick checklist before you read an anchor announcement

1. Check that the issue is book-built and whether anchors are being used. The RHP will tell you.
2. Note the anchor bidding date (T−1 working day) and the public opening and closing dates.
3. Keep rumoured demand apart from the disclosed anchor allocation list once it’s out.
4. See how much of the QIB portion actually went to anchors (up to 60%), and whether the reserved domestic 40% (33.33% MFs + 6.67% life insurers/pension funds) got filled.
5. Compare the anchor allocation price with the final offer price and the price band.
6. Mark the 30-day and 90-day unlock dates, counted from the allotment date.
7. Read the objects of the issue, the promoter lock-in and the financials in the RHP. The anchor book is one input, not the investment case.

Anchor investors are there to put institutional money on the table before retail and other applicants get their turn. SEBI’s 2025 amendment widened the reserved domestic slice and let more names share a large book. The price floor, the T−1 bidding day and the 30/90-day lock-in are still the rules every retail reader should keep straight. When you’re deciding what anchor investor in IPO headlines really mean for your own bid, go by the disclosed allocation and the RHP maths, not the rumour mill.