Mutual fund houses continued to trim their positions in Nifty names but invested big money in initial public offerings (IPOs) in March, data from brokerage firm Edelweiss Securities shows.
Mutual funds houses collectively deployed Rs 1,600 crore in the 9 IPOs— MTAR Technologies (Rs 613 crore), Craftsman Automation (Rs 183 crore), Nazara Tech (Rs 180 crore), Easy Trip Planners (Rs 150 crore), Suryoday Small Finance Bank (Rs 145 crore), Laxmi Organic (Rs 130 crore), Kalyan Jewelers (Rs 97 crore), Anupam Rasayan (Rs 65 crore) and Barbeque Nation (Rs 60 crore)— during the month, data shows.
On the other hand, they trimmed Nifty stocks from their portfolios. "Houses continue to trim Nifty names (9 out of 10 top sells)," Edelweiss has said.
Major additions by the mutual funds were BPCL, Bank of Baroda, WABCO India, SBI Card and Tata Communications. Funds also added SBI Life Insurance and TCS, while major reductions were Reliance Industries, Hindustan Unilever and ICICI Bank, the brokerage firm said.
The primary market saw a strong flow of IPOs in FY21, with companies raising more than Rs 31,000 crore. The trend is likely to continue as about 15 public offers are expected in the first quarter of FY22, with six likely lined up for April.
Read more: 15 IPOs to hit Dalal Street in April-June quarter; six likely in April
One of the major reasons behind the IPO flurry in FY22 could be the anticipation of an uptrend in the secondary market with economic recovery.
As per a PTI report, fundraising through public and rights issues surged 115 percent and 15 percent, respectively, in 2020-21 despite the uncertainty due to the COVID-19 pandemic. In terms of numbers, FY21 witnessed 55 initial public offerings (IPO) and one follow-on public offer (FPO).
After eight consecutive months of outflows, equity mutual funds saw net inflows (investments exceeding redemption) of Rs 9,115 crore in March 2021.
Contribution through systematic investment plans (SIPs) went up to Rs 9,182 crore in March compared to Rs 7,528 crore in the previous months. The number of SIP accounts outstanding increased to 3.72 crore in March compared to 3.62 crore in February.
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