Answer
Anchor investors are a special type of Qualified Institutional Buyer (QIB). QIBs are usually big financial firms that can buy and sell shares in a company’s Initial Public Offering (IPO).
Who can be an Anchor Investor?
Any QIB can apply to become an anchor investor.
Minimum Investment:
- An anchor investor must bid for shares worth more than Rs. 10 crores.
- For an IPO by a Small and Medium Enterprise (SME IPO), the minimum bid is Rs. 1 crore.
Anchor Investors vs. Regular QIBs
| Feature | Anchor Investors | Regular QIBs |
| Bidding | They bid earlier than other QIBs, and their bidding price and timeline are often separate. | They follow the standard bidding schedule. |
| Share Sales (Lock-in Period) | Shares they purchase are “locked” and cannot be sold for the first 30 days after the company lists on the stock exchange. | They can sell their shares anytime after the company is listed. |
| Role in the IPO | They agree to buy a certain number of shares at a set price. This action helps build confidence and demand for the IPO among other investors. | Their main role is to invest in the IPO. |