During 2021, three sovereign wealth funds—GIC, CPPIB and ADIA—made it to the top ten anchor investor list in India, a reflection of trends like internet penetration, the increasing size of IPOs and their belief in the India story
Presence of anchor investors—institutional investors who are allotted shares of a company just before the opening of the initial public offering (IPO) to the public—is a reflection of the large fund’s confidence in the company, like the anchoring of a ship
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Anchor investors are walking on two different paths when it comes to investing in new age startup companies in India.
The presence of anchor investors—institutional investors who are allotted shares of a company just before the opening of the initial public offering (IPO) to the public—is a reflection of the large fund’s confidence in the company, like the anchoring of a ship. During 2021, sovereign wealth funds, global funds and domestic mutual funds deployed heavily in anchor books, especially of startup or tech stocks. But currently startup stocks are under tremendous pressure as most of them are trading either below or close to their listing prices (see chart) which has put domestic mutual funds on shaky ground as they have started selling down their exposure in some of these companies. Sovereigns, however, are sitting tight, for now.