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Indian regulator bars mutual funds from participating in pre-IPO placements
Indian regulators have removed mutual funds’ access to pre-IPO placements, limiting them to anchor or public-offer participation only.
In a regulatory move today, the country’s market regulator has instructed mutual fund houses that they are no longer permitted to invest in pre-IPO share placements of companies ahead of their public listings; they may only invest as anchor investors at the time of the public issue or after listing. The direction comes amid concerns that mutual funds could carry unlisted exposures with liquidity risk. Asset management companies are now reviewing their pipeline and allocation strategy for upcoming IPOs.