Anchor Investor
A qualified institutional buyer allotted shares in an IPO a day before the issue opens to the public, at a fixed price.
How it is identified
Test: the investor is a qualified institutional buyer allotted within the anchor portion, subject to a minimum application size and a lock-in
Unit
qualitative
In depth
Anchor allotment exists to signal institutional confidence and to reduce the risk of an issue failing, since a portion is placed before the public book opens. Anchors face a lock-in — a portion for a shorter period and the remainder for longer — which staggers the supply that hits the market after listing. The identity and price of anchor allottees are disclosed, and the composition is genuinely informative: long-only global funds signal differently from a list of unfamiliar entities. The expiry of anchor lock-ins is a known future supply event that is often visible in the price around those dates.
Worked example
An issue allots ₹900 crore to anchors, half locked in for 30 days and half for 90. The 30-day expiry brings ₹450 crore of potential supply to a market that has been trading a fraction of that daily.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Anchor Investor” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.