Edelweiss Recently Listed IPO Fund will only allow investments of up to Rs 1 lakh a day per investor from February 1.
The limit will be on lump sum investment, systematic investment plan, systematic transfer plan, and other modes of investments.
However, the limit will not apply to any systematic investment plan or systematic transfer plan started before January 31.
"It is largely to maintain portfolio liquidity and factoring in the IPO pipeline for the coming months. If there are some large IPOs coming and the liquidity improves we may review these limits," said Niranjan Avasthi, head-product and marketing, Edelweiss Mutual Fund.
In a separate note, the fund house said that the fund had quickly grown and reached a scale where it was prudent to limit inflows.
The fund currently manages investor assets worth Rs 1,100 crore.
IPO boom
The fund's popularity has grown recently thanks to a record year for IPOs seen in 2021. The funds raised through IPOs in 2021 stood at Rs 1.19 lakh crore.
The Edelweiss Recently Listed IPO Fund's mandate is to participate in the IPOs, where the fund manager sees opportunities, as well as in companies that are likely to launch their IPOs.
In the last one-year period, the fund has given returns of 57 percent, while in the three-year period, the fund has delivered compound annualised returns of 37 percent.
Retail investors showed strong interest in the IPO market as new-age businesses such as Nykaa, Zomato and Paytm floated their IPOs in 2021.
For example, the IPO of beauty and personal care platform Nykaa got subscribed 81.78 times with the retail shares getting subscribed 12.24 times.
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