New Delhi: Market regulator SEBI has prohibited mutual funds from investing in pre-IPO shares (buying or selling shares before an IPO).
However, according to sources, mutual funds will still be allowed to participate in anchor rounds.
This decision aims to increase market liquidity and make IPO valuations more transparent.
Earlier this month, SEBI introduced major changes to the share allotment rules for anchor investors.
The goal was to increase the participation of domestic institutional investors such as mutual funds, insurance companies, and pension funds.
SEBI Chairman Tuhin Kant Pandey also clarified on Friday that the regulator is not planning to regulate digital gold or e-gold, as these products do not fall under SEBI’s jurisdiction.
REITs to Be Included in Market Indices
SEBI will now work with industry bodies to include REITs (Real Estate Investment Trusts) in market indices.
This was announced by Tuhin Kant Pandey at the first national conclave on InvITs and REITs, organised by the India InvITs Association (BIA) and the Indian REITs Association (IRA) in New Delhi.
Pandey said that once REITs are added to market indices, their liquidity will naturally increase. SEBI is also considering additional measures to make business operations easier for REITs and InvITs (Infrastructure Investment Trusts).
What Are REITs?
REITs are companies that own large real estate properties such as malls and office buildings. They allow investors to buy shares in high-value real estate and earn returns over time in the form of dividends.
Changes in Anchor Investor Allocation Rules
SEBI has also amended the share allocation rules for anchor investors. The purpose is to reserve a larger portion of shares for domestic institutional investors like mutual funds, insurance companies, and pension funds.
Under the new rules:
The total allocation for anchor investors has increased from 33% to 40%.
Of this, 33% is reserved for mutual funds.
The remaining 7% is reserved for insurance and pension funds.
If the 7% portion for insurance and pension funds remains unsold, it will be allotted to mutual funds.