FPIs Lead the Pack as Top Sellers Among Anchor Investors in IPOs, Reveals Sebi Study
Recent findings from a comprehensive study by Sebi highlight significant trends regarding Foreign Portfolio Investors (FPIs), specifically their role as the predominant sellers among anchor investors. The analysis, which examined 242 mainboard IPOs launched between April 2022 and October 2025, underscores a marked price pressure on IPO stocks, particularly during the 30-day unlock window. Notably, IPOs experiencing the highest anchor-exit intensity, where more than 10% of anchor holdings were liquidated, demonstrated an average price impact of -3.5%, with a median price effect of approximately -6% during the T+29 to T+33 period. This trend is markedly exacerbated in smaller IPO categories, where FPIs demonstrated the highest exit rates, averaging 24.5% of their anchor allotments.
The research indicates that the intensity of exit selling significantly influences price behavior. For IPOs with 2.5-10% anchor holdings sold, the price impact recorded was -1.3%, contrasting sharply with only -0.4% for those with up to 2.5% exits. However, the impact of these initial sell-offs appears to dissipate beyond the first unlock window, as price changes approach neutrality across all selling intensity categories in the 90-day time frame. This observation suggests a temporary surge in supply pressure immediately following the lock-in periods, which does not persist at later intervals.
The longitudinal analysis revealed a troubling trend, with the aggregate weighted exit rate escalating from 3.5% at T+30 to a staggering 50.7% by T+365. This indicates a substantial portion of anchor allotments—approximately half—are liquidated within a year post-IPO, thereby demonstrating that initial lock-in periods do not account for all eventual selling behavior. FPIs are particularly active in this exit strategy, liquidating around 60% of their anchor allotments within a year, highlighting their pivotal role in IPO market dynamics alongside other institutional investors, albeit at a pace less than that of corporates and AIFs.
Moreover, a significant distinction arises when comparing smaller IPO sizes against larger ones; those within the Rs 0-250 crore range experienced a staggering 72.5% exit by T+365, versus 40.8% for larger IPOs in the Rs 1,001-2,500 crore bracket. Such findings indicate an increased vulnerability of smaller IPOs to anchor selling pressures, which could pose challenges for future capital endeavors in this segment. Overall, these insights advise Wealthova investors to closely monitor FPIs’ behaviors and the ongoing market sentiment regarding IPOs, particularly during key unlock periods.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)