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Anchor investors sell off faster than mutual funds after IPO lock-ins end

A Sebi study of 242 mainboard IPOs found anchor selling rises after the first unlock, and foreign portfolio investors exited nearly 60% of anchor allocations by 365 days.

Reported · Written up by our desk · Emerging Markets

Anchor investors, large institutions that get shares in an IPO before it opens to the public, tend to sell their holdings gradually once lock-in periods expire, but the selling pace varies sharply by investor type, according to a Sebi study cited by LiveMint Markets.

The study, published Thursday, analyzed anchor investor behavior across 242 mainboard IPOs identified through their ISINs, covering listings between April 2022 and October 2025. It found selling stays limited right after the first lock-in ends, then increases steadily over the subsequent months, with about half of the aggregate anchor allotment value disposed of by 365 days for a linked sample of 167 IPOs.

Sebi rules lock 100% of an anchor investor’s allotted shares for 30 days from the date of allotment and 50% for 90 days, a structure designed to stagger potential selling pressure. On a weighted basis, only 3.2% of the anchor portion had been sold at the first unlock, rising to about 8% by 60 days and 17.3% by 90 days, suggesting investors spread exits rather than selling immediately.

Foreign portfolio investors were the more active sellers, with about 19.8% of their anchor allocation sold by 90 days versus 14.7% for mutual funds. By 365 days, FPIs had sold about 60% of their anchor allocations, compared with around 38% for mutual funds, and the study also linked sharper anchor exits to smaller IPO sizes, with the smallest issues showing the highest exits.

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