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Are Institutional “Anchor Investors” in Indian Primary Market Incompetent , Compromised or Both

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Indian IPO Market has recently seen  a spate of Low Quality Junk Issues which make no valuation sense given the fundamentals.Many of the stocks have gone down sharply on the day of the listing while others have been doing a “pump and dump” routine.In fact 5 out of the 9 IPOs to list in the Indian market are producing losses for investors despite India being on the throes of a strong bull market.Crappy issues are coming out regularly being egged on by investment bankers both big and small out to make a fast buck at the expense of investors.Manipulation is easy in the small micro caps with Stock Market Regulator SEBI largely a mute spectator.Except for some gentle scolding SEBI remains strangely asleep at the wheel.

Institutional Investors Are Incompetent ,Compromised or Both

Indian IPO Rules allows the Merchant Bankers of the Issue to give favored institutional clients a part of the IPO even before the issue starts.This has the advantage for both parties as funds get a guaranteed portion of the IPO and Bankers can  tout the quality of the company.However you would have to question these “Anchor Investors‘ on how they invest in such IPOs.Prestige Estates a Realty Company coming out with an IPO is another low quality company to come out with a high valuation.So finding 23 Anchor Investors is a surprise.Despite the Real Estate Market being avoided by Fund Mangers due to questionable practice,23 Funds have found it worthwhile to add Prestige Estates to their portfolio.Makes you wonder if Institutional Investors are Plain Incompetent ,Compromised or Both

Prestige Estates IPO opens, ropes in anchor investors – MoneyControl

South based real estate company Prestige Estates Projects’ initial public offering has opened for subscription today. The company aims to raise Rs 1200 crore through IPO and has set a price band at Rs 172-183 per share.

Prestige Estates has received commitment of Rs 215.46 crore from anchor investors on Monday. It has finalised allocation of 1,17,73,770  equity shares at Rs 183 a share, at higher end of price band.

About 23 Anchor investors participated in the issue, which are Reliance MF, Sundaram BNP,  HDFC MF, EMM Umbrella Funds, Alliance Berstein India Growth Fund, Indus Capital Advisor UK, Govt of Singapore, Master Trust Bank of Japan, DSP Blackrock, Credit Suisse, Lloyd George Investment Management, Birla Sun Life, HSBC MF, India Fund, Mirae and Axis MF.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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