The markets are at an all-time high and it’s raining IPOs on Dalal Street. In the last one year, the total issue size of all the IPO was over Rs 43,000 crores. According to the National Stock Exchange (NSE), 69.48 crores shares of Zomato Ltd were traded on day one, which accounted for a total transaction value of Rs. 8,625 crores. Such massive trading volumes are only possible when institutional investors like Mutual Fund engage in it. During this IPO season, Mutual Funds are taking advantage of the short term windfall gains that IPOs are currently delivering. Let us see how mutual funds are making money from IPO investments.
Mutual Funds have been very active participants in the IPO market. The table below shows the number of schemes in each AMC that have invested in IPOs in the last one year. We have listed down the top 10 AMC who have applied for a maximum number of IPOs and all other AMCs that have subscribed have been clubbed together in ‘Others’.
*1 month holding was not over as on the date of the last portfolio disclosure
Mutual Funds are definitely pumping money into IPOs to encash these opportunities. Are you also an active participant or still waiting in the wings? The table below shows a matrix of listing gain of the above mentioned 36 IPOs.
Of the total IPOs issued in the last one year, 72% were listed at a premium while 28% opened at a discount.
With the equity markets touching new highs, the IPO market has also become very vibrant with a host of companies waiting in the pipeline to be listed. Currently, PFRDA doesn’t permit pension funds to invest in IPOs, but the PFRDA chairman has expressed that pension funds are missing on opportunities which IPOs are currently offering. So, shouldn’t you make hay while the sun shines?
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