Sebi Study: FPIs Exit IPO Anchor Investments Faster Than MFs

A new study from the market regulator, Sebi, indicates that anchor investors in Initial Public Offerings (IPOs) progressively sell their shares once mandatory lock-in periods conclude. Notably, foreign portfolio investors (FPIs) divest their holdings at a significantly faster rate compared to mutual funds, suggesting institutional support does not always translate into long-term commitment.

The study, released on Thursday, analyzed the behavior of anchor investors across 242 mainboard IPOs listed between April 2022 and October 2025. It found that approximately half of the total anchor allotment value from 167 IPOs, which had completed one year, was sold within 365 days.

Anchor Investor Behavior Post-Lock-in

Anchor investors are crucial institutional buyers who gain early access to IPO shares, signaling confidence and aiding price discovery. Sebi regulations stipulate a 100% lock-in for allotted shares for 30 days from allotment, and 50% for 90 days, designed to manage immediate selling pressure.

Selling activity remains minimal immediately after the initial 30-day lock-in, then steadily increases over subsequent months. The weighted average of the anchor portion sold was:

3.2% after the 30-day lock-in.

8% by 60 days.

17.3% by 90 days.

This pattern shows investors generally spread their selling over time rather than exiting all at once.

FPIs Outpace Mutual Funds in Divestment

The study identified a clear disparity in selling behavior between different types of anchor investors. FPIs exhibited more aggressive selling compared to their domestic counterparts.

By 90 days, FPIs had sold 19.8% of their anchor allocation.

In contrast, mutual funds had sold 14.7% of their allocation by 90 days.

This gap widened significantly over a full year, with FPIs divesting approximately 60% of their allocation within 365 days, while mutual funds sold around 38%.

IPO Size and Market Impact

A notable correlation emerged between IPO size and the extent of anchor selling. The smallest issues, defined as those between ₹0-250 crore, experienced the highest rates of exit.

For these smallest IPOs, the aggregate exit reached:

9.1% at 30 days.

20.3% at 60 days.

32.4% after 90 days.

Approximately 72.5% by one year.

Furthermore, the study found that heavy anchor selling, defined as more than 10% of the anchor portion sold during the first unlock window, led to a mean price impact of approximately -3.5% and a median decline of around 6%. The price impact observed around the 90-day unlock period was considerably weaker.