Anchor investor
is a concept launched by Securities Exchange Board of India (SEBI) in 2009. Anchor investors are institutional investors who are invited to subscribe the shares before the Initial Public Offers (IPOs) open so that it jazzes up the popularity of the issue.
As the name denotes, the anchor investors are required to take up the share at a fixed price to make other investors confident and improve the demand of the share. This process also helps to improve the investment opportunity for retail investors with the company. Each anchor investor needs to invest a minimum of Rs 10 crore in the issue.
Features of Anchor InvestorsCheck out some of the features of anchor investment provided below.- The anchor investor who apply for the anchor quota surely get guaranteed allotment.
- Anchor investors are able to make an offer of shares at anywhere. It is to be noted that it should be within the price band which is declared by the company.
- The anchor investor is not allowed to sell his/her share for at least 30 days after the allotment. Investors who want to flip shares on the listing are advised not to use this anchor route.
- One of the main features of anchor investment is, the allotment is done a day before an IPO opens.
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