Indian Tech IPO Boom Fueled by Anchor Investors

India’s startup ecosystem has seen a surge in new-age tech companies going public, with 55 companies launching IPOs in recent years. Since the beginning of 2025, approximately 18 of these firms have debuted on the public market, buoyed by strong investor interest in high-risk, high-growth opportunities. A key element in these IPOs is the participation of anchor investors, whose involvement can significantly bolster a company’s market debut.

Anchor investors are typically large institutional entities, such as mutual funds, sovereign wealth funds, insurance companies, and foreign institutional investors. These investors are allocated a portion of the IPO shares before the public offering, often at the upper end of the price band. Their participation serves as an endorsement of the company’s valuation and signals confidence in the offering.

Ambareesh Baliga, an independent market analyst, noted that anchor investors provide early validation and help build momentum for the IPO. Anchor allocations can represent up to 60% of the Qualified Institutional Buyer (QIB) portion, ensuring a substantial part of the institutional book is committed before the IPO opens to the public. This improves subscription rates and reassures retail and high-net-worth investors.

Additionally, anchor investors are subject to a lock-in period, which helps stabilize shareholding and reduces the likelihood of immediate sell-offs after listing. Baliga added, “There is still huge liquidity with institutional investors which needs to be deployed. Anchor book ensures bulk allotment based on the relationship and ‘other’ parameters.”

Domestic mutual funds, including SBI Mutual Fund, ICICI Prudential MF, and Axis Mutual Fund, have been major participants in new-age tech IPOs. Foreign investors such as the Government of Singapore, Societe Generale, and Massachusetts Institute of Technology (MIT) also frequently engage in anchor rounds.

SBI Mutual Fund has been particularly active, infusing ₹1,739.63 Cr across 10 companies, including Ather, Urban Company, Pine Labs, Lenskart, Meesho, and Groww. Aditya Birla Sun Life Mutual Fund has invested ₹893.25 Cr in 12 companies, while ICICI Prudential Mutual Fund has deployed ₹854.54 Cr across 10 companies.

Other significant anchor investors include NIPPON India Mutual Fund, Goldman Sachs, Franklin Templeton, HDFC Mutual Fund, and Amundi, each contributing substantial capital to various new-age tech IPOs.

With a growing pipeline of new-age tech companies planning IPOs, anchor investors are expected to continue playing a vital role in the Indian startup ecosystem, providing crucial support and validation for these emerging businesses.