Anchor investor - SEBI's concept.

Q.  An anchor investor is one of the following:
- Published on 14 Sep 15

a. Non-qualified institutional buyer making application for value of INR 10 crore or more through book-building process
b. Qualified Institutional buyer making application for value of INR 10 crore or more through book-building process
c. Preferential Institutional Buyer making application for value of INR 10 crore or more through book-building process
d. None of the above

ANSWER: Qualified Institutional buyer making application for value of INR 10 crore or more through book-building process
 
SEBI introduced the concept of anchor investors in public issues in 2009. This move was to impact pricing of IPOs. Anchor investors benefit IPOs as equity markets are volatile. Anchor investors attract investors to public offers before hitting capital markets to infuse confidence. Value and volume of anchor subscriptions are an indicator of the soundness of the firm’s offer. This also sets a benchmark and provides for guidelines for issue pricing and interest among QIBs

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