SEBI WANTS MUTUAL FUND ALLOCATIONS IN ANCHOR INVESTOR QUOTA

The Securities and Exchange Board of India (SEBI) has recommended reservation for domestic mutual funds within the quota allocated for “anchor investors” in initial public offers (IPOs).The concept of anchor investors was introduced with a view to bring high quality investors. This allows for 30 per cent of the quota for qualified institutional buyers (QIBs) to be allocated to anchor investors. For domestic mutual funds, SEBI said the quota should be one-third of the anchor investor portion or 10 per cent of the QIB portion. Anchor investors will have to invest a minimum of Rs. 10
crore and bring in 25 per cent of the margin money on application and the remaining 75 per cent within two days of the issue closing. SEBI has also said if the anchor investor allocation is less than 30 per cent of the QIB quota, the remainder can be allocated to other investors. Those allotted shares under the anchor investor quota can also apply for the same IPO under the general QIB quota.