Why the category exists
A book-built IPO has a problem of sequence. The company wants demand to be visible early, because visible demand attracts more of it; investors want to see demand before committing. The anchor round breaks the deadlock. A set of institutions — mutual funds, insurers, foreign portfolio investors, pension funds — agree to take shares at a price fixed before the public book opens, and their names and quantities are published.
For the company and its bankers, this de-risks the issue: a meaningful part of the institutional portion is spoken for before a single retail bid arrives. For the anchor, the trade is size and certainty — they get a large allocation without competing in a scramble — against the risk of being locked in while everyone else can sell on day one.
How the allocation works
Anchor allocation comes out of the qualified institutional buyer (QIB) portion, not on top of it. Up to 60% of the QIB portion can go to anchors. Whatever they take reduces what is left for other institutions to bid on during the public window, which is why a heavily anchored issue often shows a smaller-looking QIB reservation in the subscription table.
The anchor bid happens one working day before the issue opens. The price is set then and does not move, even if the public book later prices at a different point in the band — if the final issue price comes out above the anchor price, anchors pay the difference; if it comes out below, they are not refunded. In practice most issues price at the top of the band and the two are the same number.
A third of the anchor portion is reserved for domestic mutual funds, provided there is demand from them at or above the anchor price. That reservation is the reason you often see a cluster of familiar fund names at the top of an anchor table.
The lock-in
Anchor shares cannot be sold immediately. Half the allocation is locked for 30 days from allotment and the other half for 90 days. This is the part most worth understanding, because it puts two dates on the calendar after listing when a block of shares becomes sellable at once.
Those dates are not predictions. Plenty of anchors hold well past expiry, and a lock-in ending is not the same as shares being sold. But if a stock is thinly traded and the anchor book was large relative to the float, the 30-day and 90-day marks are worth knowing about rather than being surprised by.
Reading an anchor book
The anchor allocation report is filed with the exchange the day the round completes. It lists every investor, the shares each received, and the price. What it can tell you:
- Whether real institutions showed up. Large domestic mutual funds and established foreign investors putting in size is a different signal from a book filled with small, unfamiliar entities.
- How concentrated it is. Thirty investors sharing the portion is a broader vote of confidence than three taking most of it.
- How much of the QIB portion is already gone. This changes what the subscription figures mean during bidding — a QIB category that looks lightly covered may simply have had most of its shares allocated before the window opened.
What it cannot tell you is whether the issue is worth buying. Anchors are buying an allocation at a negotiated price with a research team behind them and a portfolio to spread the risk across. A retail applicant buying one lot has none of those things. Their participation is information, not endorsement.
Where we get the numbers
We read the anchor allocation report filed with the exchange and publish the table only when the individual allocations add up to the total the document itself declares. If they do not reconcile, we show nothing and link the filing instead.
Roughly half the anchor letters in this market are filed as scanned images with no text layer, sometimes scans the issuer has already run through its own OCR, which produces characters but not readable words. Those cannot be parsed by anything. Where you see an issue with a link to the filing but no table, that is why — the alternative would be publishing figures we cannot verify.
You can see which issues have a reconciled anchor table on any IPO page from the live board.