Anchor investors permitted in Indian IPOs

In a move welcomed by market participants, India's capital markets regulator relaxes its equity issuance rules and, most significantly, will now allow issuers to bring anchor investors into first-time share sales.

India's stockmarket watchdog, the Securities and Exchange Board of India Sebi, last week announced new guidelines governing initial public offerings and follow-on offerings. In the most significant change announced, Sebi will now allow anchor investors to buy up to 30% of the portion reserved for qualified institutional buyers QIBs in an IPO.

Companies faced with a volatile market on the eve of issue launch, are most likely to make use of this provision, said Donald D'souza,...

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