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SEBI Must Not amend Rules for Anchor Investors

November 11, 2009

Going by the recent dull listings of IPO on the Street, Anchor Investors [Mostly, FIIs] are back at the doors of SEBI begging to relax rules for Anchor Investors.

Unlike pre-placement which may have lockin period of 12 months, Anchor Investors have just lock-in period of 30 days. They pay 25% upfront and the remaining 75% upon the closure of the IPO. However, they have come in as long term investors and are expected not to SELL the shares on the day of listing or atleast for the first 30 days.

Now why do they want relaxation on 30 days lockin ? It is the abnormal pricing that has led to destruction of Anchor Investors wealth. In any case, as an Anchor Investor why should you be bothered as you are BUYING the Long Term Growth Story of SHELL companies like IndiaBulls Power or Pipavav Shipyard ?

The Goal of these Anchor Investors is very clear – Make Short Term Money. If SEBI is an entity of integrity, then they should increase the lockin period for any kind of pre-placement IPOs to 12 months.

We Strictly Warn the Board of SEBI that any relaxation of rules for Anchor Investors will be challenged and the Finance Minsitsry shall not be spared as well.

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