In a consultation paper released on July 31, 2025, the Sebi proposed allowing life insurance companies and pension funds—registered with the IRDAI and PFRDA, respectively—to participate in the anchor investor segment. At present, only mutual funds have a mandatory 33% allocation within this category.
The regulator also suggested raising the overall anchor investor quota from 33% to 40% to encourage greater participation from life insurers, pension funds, and domestic mutual funds. Such a move, Sebi noted, would broaden the base of long-term investors while maintaining the one-third reservation for mutual funds, thereby improving the depth and stability of anchor investments.
The Sebi further observed that retail investors have continued to invest in equity markets through mutual funds despite bouts of market volatility. While direct retail participation has remained largely unchanged over the past three years, investments through mutual funds have seen steady growth.