Sebi on Thursday proposed changes to the structure of large IPOs, including increasing the allocation limit for institutional buyers and reducing the share reserved for retail investors.
It said while average IPO sizes have been increasing, direct retail participation has remained flat over the past three years. For large issues, retail subscription levels have been particularly muted.
In a consultation paper published on its website, Sebi proposed that for IPOs exceeding ₹5,000 crore, the retail investor allocation may be reduced to 25 per cent from the current 35 per cent, while the allocation for institutional buyers may be increased from 50 per cent to 60 per cent in a graded manner. It also proposed increasing the number of permissible anchor investor allottees for allocations above ₹250 crore, aiming to ease participation for large foreign portfolio investors managing multiple funds.
Sebi also suggested including insurance companies and pension funds in the reserved category of the anchor investor portion, alongside mutual funds. It proposed raising the reservation for life insurers, pension funds, and domestic mutual funds from 30 per cent to 40 per cent of the anchor investor portion-of which one-third would remain reserved for domestic mutual funds, while 7 per cent would be set aside for insurance companies and pension funds.
