How different is QIB from anchor investor?

A Qualified Institutional Buyer (QIB) is an investor who can apply to be an anchor investor. QIBs are usually large financial institutions that are allowed to sell shares at any time after the company goes public.

To become an anchor investor, an applicant must make a bid of more than Rs. 10 crores. However, for an SME IPO, the minimum bid amount for an anchor investor is Rs. 1 crore.

Anchor investors play a crucial role in attracting investors for public offerings. Although they are part of QIBs, anchor investors have some differences. They are as follows:

• Bid price: The bid price and bidding window for anchor investors are different.
• Selling shares: QIBs can sell shares anytime after listing but shares offered to anchor investors are locked for 30 days.
• Bidding early: Anchor investors bid earlier than the normal QIBs.
• Instilling confidence: Anchor investors are obliged to purchase shares at a certain price to instil confidence in other investors and generate demand for the IPO on the market.