Decoded: Who are anchor investors and what role do they play in IPOs?

In most cases, the demand in the anchor category gives an indication to how successful the IPO is likely to be

Record mobilisation via initial public offerings (IPOs) this year has turned the spotlight on anchor investors. Who are anc­hor investors and what role do they play? Let’s find out.

Who is an anchor investor?

Anchor investors (referred to as cornerstone investors in some global markets) are marquee institutional investors who are allotted shares in a company ahead of its IPO. This is done to demonstrate healthy demand for the shares of soon-to-be-listed companies. Typically, if the list of anchor investors is good, it provides a boost to the IPO as it lures other investors to put their money in the