SEBI Study Reveals Massive Anchor Selloff: FPIs Explode as Biggest Sellers in IPO Market

SEBI Study Reveals Massive Anchor Selloff: FPIs Explode as Biggest Sellers in IPO Market​

A comprehensive study released by the Securities and Exchange Board of India (SEBI) reveals a sharp trend of anchor investor divestment following initial public offerings (IPOs). The findings show that anchors, who commit large blocks of shares before listing, have sold nearly half of their aggregate allotments within one year. Foreign Portfolio Investors (FPIs) stand out as the most aggressive sellers in this trend.

The study examined 242 IPOs listed between April 2022 and October 2025, analyzing anchor allotment data across several time points to gauge short-term versus long-term holding behaviour. The results indicate a steady escalation of selling pressure over an extended period.

Anchor Exit Trends Over Time​

Initial anchor exit was modest immediately after the first lock-in expired, accounting for 3.2 percent of the allotment. This rate climbed to approximately 8 percent by 60 days, and further rose to 17.3 percent following the second unlock at 90 days.

Significantly, selling accelerates as IPOs mature over a full year. For a cohort of 167 IPOs with complete one-year holding histories, cumulative anchor exit rose from around 4 percent at 30 days to 51 percent at 365 days. This demonstrates that the majority of anchors do not aggressively liquidate their holdings immediately after mandatory lock-ins expire but gradually increase selling over time.

Dominant Investor Groups and Selling Patterns​

FPIs constituted the largest share of anchor allotments, holding 43.8 percent of the allocations. Mutual Funds (MF) followed closely, accounting for 38.5 percent. Other Qualified Institutional Buyers (QIBs), including banks and insurance companies, accounted for 10.5 percent, while Alternative Investment Funds (AIFs) held 5.3 percent.

The divergence in selling behavior between FPIs and Mutual Funds became notably pronounced over time. By the 90-day mark, FPIs had exited around 20 percent of their anchor allocation, compared to approximately 15 percent for mutual funds. This gap widened substantially by the one-year anniversary; FPI exits had surged to about 60 percent, while mutual fund exits reached 38 percent.

Financial Losses from Anchor Selling​

FPIs were identified as the primary drivers of absolute anchor selling. Their cumulative exit over one year amounted to about ₹22,474 crore against an original allotment of ₹37,491 crore. Mutual funds, in comparison, sold approximately ₹12,228 crore from their initial allotment of ₹31,529 crore.

The study also established a clear link between high anchor selling and subsequent price pressure. Stocks where more than 10 percent of the anchor portion was sold saw an average price decline of about 3.5 percent between T+29 and T+33 days. This is considerably higher than the 0.4 percent decline recorded for stocks where anchor exit was capped at 2.5 percent.

Issue Size Impact on Investor Divestment​

The analysis indicated that the size of an IPO correlated significantly with the degree of anchor selling. IPOs with an issue size up to ₹250 crore experienced the highest level of exits across the board. These smaller offerings saw 32.4 percent of their anchor holdings sold at 90 days. For a full one-year period, 72.5 percent of anchor holdings in this category had been divested.

This rate contrasts sharply with IPOs sized between ₹1,001 crore and ₹2,500 crore, where only 40.8 percent of their anchor holdings were sold within that same one-year period.

FPIs Lead High-Exit Category in Selling​

In the specific segment of high-exit stocks (where more than 10 percent of the anchor portion was sold), FPIs led the heavy selling, recording an average exit rate of 24.5 percent. This significantly exceeded the corresponding figure for mutual funds, which recorded an average exit of 11.5 percent. The findings point to a marked difference in the investment behaviour between these two major anchor groups, suggesting that mutual funds maintained greater retention of their IPO allocations compared to FPIs.