Tata Technologies IPO anchor round: Mutual funds that invested and those skipped

The funds were raised at the higher end of the Rs 475-500 price band.

As many as 17 domestic mutual fund houses through a total of 39 schemes have picked shares worth Rs 355 crore in the anchor allocation round of Tata Technologies.

As per the company letter to stock exchanges released on November 21, the global engineering services raised a total of Rs 791 crore from 67 investors through the anchor book, a day before the Tata Group's first IPO in almost 20 years opens for subscription.

The funds were raised at the higher end of the Rs 475-500 price band.

Notably, a total of 70,99,980 shares or 44.88 percent of the overall anchor quota were subscribed by the domestic AMCs.

Tata Technologies IPO has been among the most awaited initial public offers (IPO) on Dalal Street and brokerages have a positive view on the issue.

SBI Securities in a recent note said, “We believe, Tata Technologies is well placed to encash on the growth opportunities in ER&D space and looking at the relatively cheaper valuations, we recommend investors to subscribe to the issue."

Master Capital Services also suggested that investors can invest in the Tata group IPO with a long-term perspective.

AMCs that invested

The anchor allocation letter showed that India’s two biggest asset management companies, SBI Mutual Fund and ICICI Prudential Mutual Fund, invested the highest sum in the round at Rs 42 crore each.

SBI picked up these shares via SBI Technology Opportunities Fund (Rs 34 crore) and SBI Multi Asset Allocation Fund (Rs 8 crore).

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ICICI Prudential Mutual Fund invested via three schemes - large & mid cap, innovation fund and midcap fund. India’s second-biggest fund house by assets under management (AUM) invested Rs 14 crore each via three schemes.

Next, Aditya Birla Sun Life Mutual Fund, Franklin Templeton India and Nippon India Mutual Fund invested Rs 32 crore each in the anchor allocation round of Tata Technologies.

ABSL MF and FT India invested via 2 schemes each while 3 schemes of Nippon India MF participated in the round.

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In terms of numbers, Edelweiss Mutual Fund’s seven schemes picked up shares worth 15 crore. Notably, none of Edelweiss’s schemes picked shares worth more than Rs 5 crore.

Types of schemes

A first look at the data showed three multi-cap funds invested in the anchor round -- Aditya Birla Sun Life Multi-Cap, Edelweiss Multi Cap and Nippon India Multi Cap Fund.

Also, two Equity Linked Savings Scheme (ELSS) funds- Baroda BNP Paribas ElSS and Canara Robeco ELSS Tax Saver – participated in the round.

Notably, seven schemes based on the mid-cap segment invested in the IPO. These included Bandhan Midcap, Edelweiss Mid Cap, Edelweiss Large & Mid Cap, ICICI Prudential Large & Mid Cap Fund, JM Midcap Fund and Motilal Oswal Midcap.

Key misses

Tata Mutual Fund, which is a part of the Tata Group that owns Tata Technologies was missing in the anchor round allocation. Further, HDFC Mutual Fund, India’s third biggest AMC, also didn’t take part in the anchor round.

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Among the top 10 mutual fund houses, UTI Mutual Fund also didn't invest in the anchor round of Tata Technologies.

To be sure, individual fund houses have internal processes on which they decide to invest or skip investing in the anchor round of IPOs.