DRHP LensQualified institutional buyers (QIBs) such as mutual funds, insurers, pension funds and foreign portfolio investors meet management, build models and bid in size. Retail investors cannot sit in those meetings, but almost everything institutions check is printed in the offer document.
The 12 checks
- Growth. Is revenue compounding fast enough to grow into the valuation? Three years of sales in the restated financials.
- Profitability. Are EBITDA and net margins healthy and steady, or thin and volatile?
- Return on capital. Return on equity and on capital employed against peers. Above 15% is usually comfortable.
- Cash conversion. Operating cash flow ÷ profit after tax. Profit that never turns into cash is a warning.
- Balance sheet. Debt to equity after the issue, and how much of the fresh issue repays loans.
- Valuation. P/E, P/B and EV/EBITDA against listed peers and the sector. See how to value an IPO.
- Use of proceeds. Fresh issue versus offer for sale, and how specific the objects are.
- Promoter skin in the game. Promoter holding after the issue, pledges and promoter selling in the OFS.
- Governance and legal. Outstanding litigation, contingent liabilities and related-party transactions against net worth.
- Earnings quality. Other income as a share of profit, receivable days and one-off gains.
- Industry tailwind. The growth rate of the market in the industry chapter, and the company's share of it.
- Banker's track record. How the lead managers' recent IPOs listed, disclosed near the end of the document.
How the anchor book works
- Up to 60% of the QIB portion of a main-board IPO can go to anchor investors one working day before the issue opens.
- From 30 November 2025, 40% of the anchor book is reserved for domestic institutions: 33% for mutual funds and 7% for insurers and pension funds, with any unused part of the 7% going to mutual funds.
- Anchors are locked in: half of their shares for 30 days after allotment and the rest for 90 days. Those dates often bring extra selling.
The anchor list is published on the stock exchange websites the evening before the issue opens. Long-only mutual funds and insurers in the list signal more conviction than a list dominated by short-term funds.
Reading QIB subscription
The QIB number on the last day is the closest thing retail investors get to a professional vote.
- Above 50x: very strong institutional demand.
- 10x to 50x: solid demand.
- 2x to 10x: lukewarm; look harder at valuation.
- Below 2x: professionals who met management are not convinced.
Retail or HNI frenzy with weak QIB demand often fades after listing. Read more in IPO subscription status explained.
Also read: How to value an IPO: 10 methods · Should I apply for this IPO? · IPO subscription status explained
Run it on a real offer document
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Analyse a documentFrequently asked questions
Who are QIBs in an IPO?
Qualified institutional buyers are SEBI-registered institutions such as mutual funds, insurance companies, pension funds, banks and foreign portfolio investors. In a main-board IPO under Regulation 6(1), up to 50% of the issue is reserved for them.
What is the anchor investor lock-in period?
Half of the shares allotted to anchor investors are locked in for 30 days from allotment and the rest for 90 days.
Does strong QIB subscription mean the IPO will list at a gain?
No. It shows professional demand, which often helps listing, but the listing price also depends on market conditions, valuation and grey market sentiment.
What changed in the anchor book in 2025?
From 30 November 2025 SEBI reserved 40% of the anchor portion for domestic institutions: 33% for mutual funds and 7% for insurers and pension funds.
This guide is general education about how Indian offer documents are structured. It is not investment advice or a recommendation to subscribe to any issue. Regulations change; always read the current offer document and the SEBI regulations it refers to, and consult a SEBI-registered investment adviser before you invest.