FPIs Exit IPO Anchor Stakes Faster Than MFs: Sebi Study

Foreign Portfolio Investors (FPIs) exit their anchor investments in mainboard Initial Public Offerings (IPOs) significantly faster than mutual funds (MFs), a new study by the Securities and Exchange Board of India (Sebi) reveals.

Key Findings on Anchor Exits

The Sebi study, based on 242 mainboard IPOs listed between April 2022 and October 2025, meticulously tracked anchor allotment, depository holdings, and closing prices. It found FPIs sold approximately 60% of their anchor allotments within a year.

In contrast, mutual funds divested only 38% of their holdings over the same period, highlighting a distinct difference in investment strategies. This analysis provides crucial insights into institutional investor behavior post-IPO listing.

Composition of Anchor Allotments

The distribution of total anchor allotment value among Qualified Institutional Buyers (QIBs) also showed FPIs as the largest participants. Their allocation represented nearly half of the total.

The Sebi report details the percentage of total anchor allotment value for each key investor category:

Foreign Portfolio Investors (FPIs) accounted for 43.8%.

Mutual Funds (MFs) held 38.5% of the total.

Other Qualified Institutional Buyers, including insurance companies and banks, comprised 10.5%.

Alternative Investment Funds (AIFs) made up the remaining 5.3%.

Pace of Investor Exits and Lock-in Rules

Anchor selling remained minimal during the initial unlock phase, with 192 out of 242 IPOs seeing less than 25% of anchor holdings sold. A further 43 IPOs recorded no selling at all during this critical early window.

FPIs sold 3% of their anchor allotments during the initial exit window, increasing to 9% by 60 days, and 20% after the second unlock period. Mutual funds demonstrated a slower exit pattern, selling 3%, 7%, and 15% respectively over the same timelines.

The anchor investor framework mandates a 100% share lock-in for 30 days, with 50% remaining locked in for a total of 90 days. This phased unlock dictates when investors can begin to divest their shares.

Aggregate Exit Trends Over a Year

The pace of aggregate weighted anchor exits accelerated significantly over a 365-day period for the 167 IPOs with available data. From approximately 4% at 30 days, exits rose to 9% at 60 days, 19% at 90 days, and 34% at 180 days.

By the 365-day mark, the overall exit rate reached 51%. FPIs recorded the highest exit rate at around 60% after a year, followed by body corporates at 58%, AIFs at 55%, and other QIBs at 46%. Mutual funds maintained the lowest exit rate at 38%.

Secondary Market Supply Dynamics

Foreign Portfolio Investors were identified as the primary source of secondary-market supply stemming from anchor exits. They sold approximately ₹1,750 crore during the first exit window, escalating to ₹4,800 crore by 60 days.

By the second exit window, FPIs had divested shares worth around ₹10,400 crore. Mutual funds also contributed to secondary market supply, selling approximately ₹1,300 crore, ₹3,200 crore, and ₹6,800 crore during the same respective periods.

Impact on Post-Listing Stock Performance

The Sebi study established a “directionally negative relationship” between the intensity of anchor exits and the subsequent stock-price performance. This effect was particularly noticeable during the initial unlock window when selling surpassed 10%.

For IPOs where anchor exits exceeded 10% during the first unlock, FPIs were responsible for an average exit of 24.5%, compared to 11.5% for mutual funds. However, the study noted that the impact on stock prices typically became more muted during the 90-day unlock period than in the more immediate 30-day window.

The study also indicated that FPI selling patterns varied by IPO size, noting that FPI selling tends to be higher in smaller IPOs.