An anchor investor is a Qualified Institutional Buyer (QIB) — mutual funds, foreign portfolio investors, sovereign wealth funds, insurance companies — that bids one working day before the public IPO bidding window opens. SEBI created the anchor mechanism to bring institutional confidence into an IPO and to set a credible pricing signal before retail bidders participate.
Anchor allocations are typically up to 60% of the QIB portion of the issue. The anchor list and the amount each investor has committed are published on the exchange's website on the anchor allocation day. Strong anchor demand — especially from blue-chip mutual funds like SBI, ICICI Prudential, or HDFC AMC — is widely read as a positive signal for the IPO's quality.
Anchor shares carry a lock-in: 50% of the allotted shares for 30 days from the date of allotment, and the remaining 50% for 90 days. This prevents anchor investors from immediately flipping their allotment on listing day, which would create downward price pressure. Retail investors often watch the anchor expiry calendar — large blocks unlocking can briefly weigh on the stock price.