Sebi bars MFs from pre-IPO placements, allows only anchor investments

The Securities and Exchange Board of India (Sebi) has restricted mutual funds (MFs) from participating in pre-IPO placement of equity shares while clarifying that MFs can invest in unlisted shares only as anchor investors ahead of an IPO. An anchor allotment is made a day before the IPO opens for the public, while pre-IPO placements are made during the months leading up to the listing. MF regulations state that MFs can invest in listed and to-be-listed shares. While the regulation has no mention of pre-IPO placements, the fact that these allotments occur before listing had created ambiguity over whether mutual funds