MUMBAI: The Securities and Exchange Board of India (Sebi) plans to make it mandatory for issuers to reserve 25% of an initial public offering (IPO) for domestic mutual funds and insurers. But if they don’t subscribe to their portion fully, the IPO could be considered a failure, said investment bankers briefed on the matter. The regulator thinks that a higher participation of 25% of the issue size or half of that slotted for qualified institutional bidders would enable a fairer valuation. Besides, it will benefit both issuers and investors as these local institutional investors play the conservative card when it comes to pricing, aligning more with retail investors. In recent weeks, the regulator has informally told merchant bankers handling th
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