A new SEBI study analyzing 242 IPOs between 2022 and 2025 reveals that anchor investors sell over 50% of their holdings within one year, undermining the goal of long-term stability. Foreign Portfolio Investors are the most active sellers, frequently offloading shares shortly after lock-in periods expire. For retail investors, this rapid exit trend creates sudden supply pressure, often leading to price drops in new listings.
The Securities and Exchange Board of India (SEBI) recently analyzed 242 mainboard IPOs listed between April 2022 and October 2025. The study found that anchor investors—who are meant to bring long-term stability to a company's listing—are frequently doing the opposite. These institutional investors sell off roughly 50.7% of their allotted shares within just one year of the IPO. This trend challenges the common belief that an anchor investor's presence at the launch is a definitive long-term vote of confidence in the company.
Patterns of Selling
The selling behavior is not uniform across all types of investors. Foreign Portfolio Investors (FPIs) are the most active sellers, having offloaded nearly 60% of their holdings within the first year. In comparison, domestic mutual funds have been more patient, selling about 38% of their positions over the same period. The selling activity is particularly aggressive in smaller companies, with IPOs sized under Rs 250 crore seeing the fastest and most significant exits compared to larger issues.
Impact on Share Prices
For retail investors, the timing of these exits is critical. Current regulations typically lock in anchor shares in two tranches, often at 30 days and 90 days. The SEBI data shows that heavy selling frequently occurs right after the 30-day lock-in period ends. This sudden release of a large volume of shares into the market increases supply, which can weigh on the stock price. The analysis indicates that stocks often experience an average price decline of approximately 3.5% when institutional investors offload their shares during these early windows.
What Lies Ahead
This trend has put pressure on regulators to rethink the current IPO framework. Discussions are currently underway regarding potential changes, such as extending the lock-in periods or increasing the minimum subscription threshold to discourage speculative participants who lack a long-term commitment. Until any new rules are implemented, individual investors should be aware that the presence of well-known anchor investors at an IPO launch is not a guarantee of long-term holding. A key monitorable for investors is the upcoming lock-in expiry dates for recent IPOs, as these windows often bring increased trading activity and potential price movement.