By definition, the anchor investor, is a bridge between the company and the public in the run up to an Initial Public Offer. An anchor investment stake is a sizable investment made in a project, by a qualified, prominent investor. Normally reputable institutions are roped in to provide the initial investment- usually a sizable amount.
The presence of this investor /s gives other people the confidence to join and invest.
Roping the anchor investor would ensure greater certainty and better price discovery in the issue process. If some informed investor is ready to come in with prior commitment, it enhances the issuer company’s ability to sell the issue and generate more confidence in the minds of other investors.
The anchor investors for PC Jewellers included - DB International (Asia) and Reliance Capital DVI Fund Mauritius, Stichting Pensioenfonds ABP, Mirae Asset Global Investment, Goldman Sachs lndia Fund, HSBC Tax Saver Equity Fund, Birla Sunlife, Tata AIA Life Insurance.
V-Mart had roped in IDFC Premier Equity Fund and Morgan Stanley Mutual Fund.