SEBI bars mutual funds from pre-IPO investments
Business
Oct 24, 2025
SEBI has just barred mutual funds from investing in pre-IPO equity placements.
From now on, mutual funds can only take part in the Anchor Investor quota or buy shares during the public IPO itself.
This change follows SEBI’s rule that mutual funds should stick to listed or soon-to-be-listed securities.
SEBI‘s focus is on investor protection
SEBI says the move is all about protecting investors. By keeping mutual funds out of unlisted shares, SEBI hopes to cut down on risks tied to liquidity and regulatory issues.
The directive was sent out via the Association of Mutual Funds in India (AMFI), and asset managers are expected to follow it right away.
What does this mean for your investments?
Mutual funds used to get in early through pre-IPO placements, sometimes snagging better deals than in anchor rounds.
Now, that early-access advantage shifts to family offices and alternative investment funds, mostly benefiting high-net-worth investors.
For regular mutual fund investors, this might mean fewer chances for extra gains from IPOs.