Anchor Investors : A new concept

by khalid on 27/09/2009 · 0 comments

anchor

Anchor investors are entities which are offered, and subscribed to, shares in an IPO before the offer opens to the public.
Anchor investors belong to the Qualified Institutional Buyers (QIBs) category, which include mutual funds, foreign institutional investors, banks, and venture capital funds – domestic and international provident and pension funds.

The concept of anchor investors came up in June this year following a directive by SEBI. Anchor investors are deemed to be in a better position than regular investors to judge the fundamentals and prospects of a company.

A company can carve out a maximum of 30 per cent of the QIB section and offer it to anchor investors. In terms of money, the minimum application size for each anchor should be Rs 10 crore.

Anchor investors also have to make available a margin of 25 per cent of their application and part with the balance within two days from the close of the issue.

The IPO of Adani Power was the first in India to use anchor investors concept. Adani Power roped in six anchors to raise about Rs 500 crore while Pipavav Shipyard secured Rs 92 crore from some top anchor investors.

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