Anchors are typically institutional investors that subscribe to an issue a day before its public opening. They pay an upfront amount and hold shares for at least a month to boost investor confidence. Sebi introduced the concept of anchor investors in IPOs in 2009. Companies opting for a public share sale prefer marquee names as anchors..
Anchor investment allows the buyer to get a fixed allotment at a fixed price without an impact cost. This is not so in the open market, where the allotment can reduce to the extent the issue is oversubscribed.
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