SEBI bars mutual funds from pre-IPO placements, limits participation to IPO and anchor tranches

India’s market regulator told fund houses they cannot invest in pre-IPO placements, clarifying mutual funds may participate only during the IPO process, including anchor portions. The move aims to prevent schemes from holding unlisted shares if listings are delayed or cancelled. Pre-IPO allocations typically involve private sales to select investors; SEBI wants mutual-fund exposure routed through regulated public issues. The clarification affects an industry managing ₹75.6 trillion and comes amid a busy primary market. Managers are reviewing processes to align with the directive ahead of upcoming issues.