Anchor Investors Including FIIs & Mutual Funds Pour Over Rs 45,000 Crore In IPOs Of 2024; Hit New Records

The year 2024 has witnessed a surge in anchor investments for initial public offerings (IPOs), with institutional investors, including foreign institutional investors (FIIs) and mutual funds (MFs), setting a benchmark. Their combined investment in anchor allotments reached Rs 45,650 crore, breaking the previous record of Rs 42,558 crore set in 2021.

FIIs and MFs Lead the Charge

Foreign institutional investors played a pivotal role, contributing Rs 25,300 crore in anchor investments - the highest since 2021 when their allocation exceeded Rs 29,000 crore. Mutual funds, on the other hand, made a landmark contribution of Rs 20,351 crore, marking a high and more than tripling their investment from the previous year. The earlier MF record stood at Rs 13,528 crore in 2021, driven by inflows into equity schemes.

While both FIIs and MFs have collectively tripled their contributions compared to last year, FIIs outperformed MFs in anchor investments for the first time in two years. Mutual funds' investments were approximately 20% lower than FIIs, reversing the trend of 2022 and 2023 when MFs consistently outpaced FPIs in anchor participation.

Key IPOs For Anchor Investments

Several marquee IPOs in 2024 attracted significant anchor investments:
Hyundai Motors India: FIIs invested Rs 4,545 crore, nearly 50% more than MFs, making it a standout IPO for anchor participation.
Swiggy: FIIs contributed Rs 2,100 crore, marginally surpassing MF investments.
NTPC Green Energy: MFs led the anchor book with Rs 1,570 crore, slightly higher than the Rs 1,493 crore invested by FIIs.
Ola Electric Mobility: This IPO also saw anchor investor participation, further boosting the year's record-setting numbers.

Top Anchor Investors

Foreign Institutional Investors (FIIs): The top five FII anchor investors this year include:
Government Pension Fund Global: Rs 1,273 crore
Government of Singapore: Rs 1,262 crore
New World Fund Inc: Rs 1,256 crore
Nomura Funds Ireland PLC: Rs 783 crore
Abu Dhabi Investment Authority: Rs 730 crore

Mutual Funds (MFs): Leading MF anchor investors were:
ICICI Prudential MF: Rs 2,261 crore
Nippon India MF: Rs 2,064 crore
HDFC MF: Rs 2,025 crore
SBI MF: Rs 1,870 crore
Kotak Mahindra MF: Rs 1,485 crore

IPO Fundraising In 2024

Indian companies raised over Rs 1.5 lakh crore through 75 mainboard IPOs in 2024, shattering previous records. This represents a significant leap from Rs 49,435 crore raised through 57 IPOs in 2023 and Rs 59,301 crore from 40 IPOs in 2022.

Domestic Institutional Investors (DIIs)

Domestic institutional investors, primarily mutual funds, have significantly increased their presence in the IPO market over the past four years. This growth is fueled by steady monthly inflows into equity schemes. Since January 2024, inflows into open-ended equity funds have totalled Rs 3.53 lakh crore. For comparison, inflows were Rs 1.61 lakh crore in both 2023 and 2022.

SEBI Anchor Investor Framework

The Securities and Exchange Board of India (SEBI) introduced the concept of anchor investors in 2009 to instil stability and confidence in the IPO market. Anchor investors play a crucial role in lending credibility to IPOs by committing large investments early, enhancing demand and building trust among retail investors, and bridging the gap between companies and the investing public.