IPO Grooves and Mutual Fund Moves

Investors have shown immense interest in the IPOs listed this week, making it a buzzing time for the market. The week saw the listing of 5 IPOs, including Tata Group’s Tata Technology, and the smooth listing of all the IPOs received applause from several industry majors. The investors on D-Street placed bids worth a total of ₹2.59 lakh crore in the five recently concluded mainboard initial public offerings (IPOs). The week-long bidding frenzy has gripped investors, and the five companies – Tata Technologies Ltd., Gandhar Oil Refineries Ltd., Fedbank Financial Services Ltd., Flair Writing Industries Ltd, and Indian Renewable Energy Development Agency (IREDA) Ltd – sustained the IPO pulse in India’s primary markets.

Below are the details of IPOs that listed this week:

The IPO of Tata Technologies created quite a buzz in the market, with its price surging three-fold from the initial offering. For retail investors who missed out on the opportunity to subscribe, mutual funds provided a silver lining by taking advantage of this golden chance. Now, amid a buzz around these mainline IPOs, only a handful of investors who got the allotment could experience the listing gain. But wait, while the retail portion of these IPOs is oversubscribed multiple times, the institutional or big players have also participated in these IPOs with the same amount of exuberance. Even though you, as a retail investor, have not got any allotment to the mainline IPOs, your mutual funds have already subscribed to the best IPOs and captured the listing gains.

Let’s have a deep dive into what the MF anchor book of these IPOs looks like:

SBI mutual fund is leading the pack in IPO bidding, with a significant allocation towards Tata Technologies. The SBI Multi Asset Allocation Fund was utilized for this purpose, with a maximum allocation towards the company. It is to be noted that HDFC AMC, one of the largest AMCs in India, have stated clear off the TATA Technologies IPO and participated in other IPOs like Flair, Gandhar and IREDA.

Source: Fisdom Research. Amount in crores

Many mutual funds have shown a preference for the Equity-Other or Thematic/Sectoral categories when it comes to allocating maximum funds towards recent IPOs. The Multicap category has also gained maximum interest for the addition of new companies to the portfolio.

A total 62 unique schemes participated in the IPO frenzy and out of those 62 schemes below mentioned schemes participated in 2 IPOs at t time.

Source: Fisdom Research. Amount in crores

Conclusion:

The recent IPO rush has been a highly energetic and dynamic phase for the market, with significant participation from both retail and institutional investors. The success of these offerings, especially for Tata Technologies and other prominent companies, highlights the immense interest and robust bidding in the market. Mutual funds played a crucial role in securing the listing gains for their investors, with a trend towards thematic/sectoral allocations showcasing a strategic approach towards portfolio diversification. With several prominent funds participating in multiple IPOs, investors who lost out on listing gains can still gain benefit out of the funds that they invested in.

Markets this week

Source: BSE and NSE

• Indian equity indices marked their fifth consecutive week of gains, with the Nifty surpassing its previous record high from September 15.
• The rally was sustained by continued support from Foreign Institutional Investors (FIIs), buoyed by favorable macroeconomic indicators and positive global cues.
• Improved market sentiment was backed by factors such as declining crude prices, lower bond yields, and reduced uncertainties regarding potential interest rate hikes by the US Federal Reserve and the European Central Bank (ECB).
• This week, FIIs demonstrated a resurgence in buying, injecting Rs 10,593.19 crore into the market, while Domestic Institutional Investors (DIIs) also contributed positively, purchasing equities valued at Rs 4,353.55 crore

Weekly Leader Board

Source: BSE

Stocks that made the news this week:

• PVR-Inox witnessed a 2 percent increase, reaching a day’s high of Rs 1,755 per share on December 1, following the inauguration of its new 6-screen venue at Jio World Plaza in Mumbai. This addition, featuring an additional Imax screen, has expanded the multiplex operator’s Imax screen count to 4 in Mumbai and 22 across India. Notably, over the past month, PVR-Inox’s stock has surged by 8 percent, outperforming the benchmark Sensex, which rose by 6 percent during the same period. This positive market response signifies investor enthusiasm surrounding the company’s expansion and strategic developments within the entertainment industry
• General Insurance Corporation of India (GIC Re) sustained its impressive performance on November 30, marking a rise of approximately 7.5 percent. Over the past seven days, the stock has surged by over 35 percent, demonstrating an astounding 50 percent increase in just 15 days. This remarkable momentum has propelled the company’s market capitalization to Rs 55,834 crore. The surge is largely credited to GIC Re’s commendable financial performance, recent credit rating upgrade, and optimistic future outlook, factors that have contributed significantly to investor confidence and the stock’s upward trajectory.
• Multi Commodity Exchange of India (MCX) witnessed a surge of over 6%, reaching a new 52-week high. This upswing follows the stock’s removal from the NSE F&O ban list. The surge coincides with the company’s announcement regarding the recovery of technology costs for its old platform from its subsidiary, Multi Commodity Exchange Clearing Corporation Ltd (MCXCCL). This development seems to have positively impacted investor sentiment, reflecting in the stock’s notable rise.

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