FPIs lead the exit as anchor investors after IPO lock-ins end: Sebi study

Anchor investors tend to sell their initial public offering (IPO) shares gradually after lock-in periods end, with foreign portfolio investors (FPIs) exiting faster than mutual funds, according to a study by the market regulator, highlighting that initial institutional support does not always become long-term commitment. Anchor investors are large institutional buyers who gain early access to shares before an IPO opens to the public.

The study, published on Thursday, analysed anchor investor behaviour across 242 mainboard IPOs, identified through their International Securities Identification Number (ISINs), listed between April 2022 and October 2025. It found that selling remains limited immediately after the first lock-in expires but rises steadily over the following months. An extended analysis covering 167 IPOs that had completed one year showed that about half of the aggregate anchor allotment value had been disposed of by 365 days.

Anchor investors are large institutional investors who receive shares in an IPO before it opens to the public. Their participation is a sign of institutional confidence, helps attract other investors, and supports demand and price discovery during the IPO process.

But the study shows that this confidence does not necessarily mean a long-term commitment.

According to Sebi regulations, 100% of the allotted shares to an anchor investor are locked in for 30 days from the date of allotment and 50% are locked in for 90 days from the date of allotment. This framework helps stagger any potential selling pressure from anchor investors.

The study found that at the first unlock, which is 30 days after allotment, only 3.2% of the anchor portion had been sold on a weighted basis. This rose to about 8% by 60 days and 17.3% by 90 days. The pattern suggests that investors generally spread their selling over time instead of exiting as soon as shares become available.

FPIs were the more active sellers. They had sold about 19.8% of their anchor allocation by 90 days, compared with 14.7% for mutual funds. The gap widened over the following months. In 365 days, FPIs had sold about 60% of their anchor allocation, while mutual funds had sold around 38%.

The study also found a clear link between IPO size and anchor selling. The smallest issues, those with an issue size of ₹0-250 crore, recorded the highest exits. Their aggregate exit was 9.1% at 30 days, 20.3% at 60 days and 32.4% after 90 days. By one year, the exit for this group reached about 72.5%.

Heavy anchor selling can also affect prices. During the first unlock window, IPOs where more than 10% of the anchor portion was sold recorded a mean price impact of about -3.5%, while the median decline was around 6%. The price impact was much weaker around the 90-day unlock.