SEBI Notification Regarding Anchor Investors, etc.


A couple of weeks ago, we had discussed some primary market reforms that were announced by SEBI. Most of those reforms have now been notified by SEBI by way of amendments to the SEBI (Disclosure and Investor Protection) Guidelines, 2000. The notification contains a fair amount of detail regarding anchor investors. Although such investors are conferred discretionary allocation rights, they are subject to a fairly onerous requirement as regards price:

If the price fixed for the public issue through book building process is higher than the price at which the allocation is made to Anchor Investors, the additional amount shall be paid by the Anchor Investors. However, if the price fixed for public issue is lower than the price at which the allocation is made to Anchor Investors, difference shall not be payable to the Anchor Investors.

One of the issues that was the subject-matter of debate in the comments to the previous post was the prohibition on issue of shares with “superior” voting rights. However, that issue is conspicuous by its absence in the recent round of changes that have been notified by SEBI. Similarly, the rights issue reforms are also yet to take effect.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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