FPIs sell 60% of IPO anchor holdings within a year, nearly 2x MFs: Sebi study

Foreign portfolio investors (FPIs) tend to exit their anchor investments in mainboard initial public offerings (IPOs) more aggressively than mutual funds (MFs), according to a Securities and Exchange Board of India (Sebi) study on anchor investor exit behaviour.

The study, based on anchor allotment, depository holding and closing price data for 242 mainboard IPOs listed on Indian stock exchanges between April 2022 and October 2025, showed that FPIs sold around 60% of their anchor allotments within a year, compared with 38% for mutual funds.

As per the Sebi report, FPIs accounted for 43.8% of the total anchor allotment value, while mutual funds (MFs) accounted for 38.5%. Other qualified institutional buyers, including insurance companies and banks, made up 10.5%, followed by alternative investment funds (AIFs) at 5.3%.

FPIs sell faster than MFs

Anchor selling remained limited during the initial unlock period. Of the 242 IPOs, 192 saw less than 25% of anchor holdings sold at the first exit window, while 43 IPOs recorded no selling.

FPIs sold 3% of their anchor allotments during the first exit window, rising to 9% by 60 days and 20% after the second unlock. In comparison, MFs sold 3%, 7% and 15%, respectively.

“FPIs have a higher median exit percentage, wider IQR (interquartile range), and heavier upper tail than that of MFs,” Sebi said.

Under the anchor investor framework, 100% of shares are locked in for 30 days, while 50% remain locked in for 90 days.

51% of anchor holdings sold within a year

The pace of selling accelerated over the following months. For 167 IPOs with data available for 365 days, aggregate weighted anchor exits rose from around 4% at 30 days to 9% at 60 days, 19% at 90 days, 34% at 180 days and 51% at 365 days.

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%. MFs had the lowest exit rate at 38%.

FPIs were also the biggest source of secondary-market supply. They sold around ₹1,750 crore during the first exit window, ₹4,800 crore by 60 days and ₹10,400 crore by the second exit window. MFs sold around ₹1,300 crore, ₹3,200 crore and ₹6,800 crore, respectively.

Anchor selling can pressure stock prices

The Sebi study found a “directionally negative relationship” between the intensity of anchor exits and stock-price performance during the first unlock window, particularly when selling exceeded 10%.

For IPOs where anchor exits were above 10% during the first unlock, FPIs accounted for an average exit of 24.5%, compared with 11.5% for MFs.

However, the impact on stock prices was generally more muted during the 90-day unlock period than during the first 30-day window.

FPI selling higher in smaller IPOs

FPI selling patterns also varied depending on IPO size. In IPOs of up to ₹250 crore, 18 of 33 issues saw FPI exits of less than 25% at the 30-day mark, while five recorded exits between 25% and 50%.

For IPOs above ₹2,500 crore, FPIs generally started selling soon after the first unlock, although the exits were largely partial.

MFs, on the other hand, showed a more conservative approach. In the ₹501-1,000 crore IPO category, 46 of 71 issues recorded no MF exit at 30 days, compared with 25 of 70 issues for FPIs.

The study found no instance of MFs exiting 100% of their anchor holdings across any issue-size category. A small number of complete exits were, however, recorded among FPIs in IPOs of up to ₹500 crore.

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