SEBI also proposes expanding the anchor investor framework by increasing the number of anchor allottees for issues above ₹250 crore, enabling wider foreign fund participation.
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HEMANSHI KAMANI/Reuters
The Securities and Exchange Board of India (SEBI) proposed changes to the allocation structure of large initial public offerings (IPOs) on Thursday, including increasing the share allocated to institutional buyers and reducing the share allocated to retail investors.
The regulator has proposed to cut retail investors’ share to 25 per cent from 35 per cent in a graded manner for large IPOs, while that for QIBs may be raised to 60 per cent from 50 per cent.
The regulator said that while the average size of IPOs has increased in recent years, “direct retail participation has remained flat over the past three years.” In large public issues, retail subscription levels have been particularly muted, SEBI said, inviting public comments by August 21.
Anchor investor pool to expand for larger IPOs
To encourage broader institutional participation, SEBI has also proposed expanding the anchor investor framework. For IPOs with anchor allocations above ₹250 crore, the number of permissible anchor investor allottees may be increased, a move aimed at facilitating participation by foreign portfolio investors managing multiple funds.
Further, SEBI recommended including insurance companies and pension funds in the reserved category of the anchor investor portion, alongside mutual funds. It suggested raising the reservation for life insurers, pension funds, and domestic mutual funds from 30 per cent to 40 per cent of the anchor book. One-third of this would remain earmarked for mutual funds, while 7 per cent would be carved out for insurers and pension funds.
Published on July 31, 2025
