New-age tech stocks turn favorite among mutual funds. Check out their top picks

Swiggy, India’s second-largest consumer app, made its debut on Dalal Street on November 13. Despite steady revenue growth, investors' reaction to its IPO was muted due to the company's continued losses and competitive nature of the business.
However, listed new-age technology stocks are, of late, finding favour among institutional investors who are looking to bet on them for the long term. As of October 31, the market value of mutual fund holdings in these companies nearly tripled to Rs 74,223 crore, up from Rs 25,051 crore seen last year.
Unlike asset-heavy traditional companies, new-age companies bet on innovative business models that leverage technology to enhance their operations.

Seven out of 17 new-age tech stocks that are listed on the bourses have delivered negative returns since listing, data available with stock research platform ACE Equity shows.
Deepak Jasani, Head - Retail Research, HDFC securities says, “Most of these companies are loss-making but aiming for operating profit, with future results indicating the timeline for profitability. Regulatory actions, such as those from RBI or the government can impact these companies, especially in the fintech space. Fresh competition from incumbent players and existing players that are entering the business can also pose challenges.”

The business models of these companies are complex, and profitability may take longer to achieve, making them less appealing to retail and HNI (high net worth individual) investors, explained Jasani.
These investments are seen as medium to long-term holdings, with hopes for business model success and value unlocking in two-five years.
Mutual funds invest a small portion in these companies to avoid missing out on potential business model success, despite the risks.
Qualified institutional buyers (QIBs) may still invest due to their ability to interpret complex models and take long-term risks, Jasani added.

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New-age companies do not fit into a single category and come from various sectors.
“India’s fintech and new-age tech sectors have shown strong momentum, which is determined by rapid digital adoption and government initiatives like demonetisation and GST,” says Trivesh, COO, Tradejini, an integrated online stock trading platform. The fintech domain is thriving, especially in countries with younger populations, like India, where digital adoption is accelerating. They are leveraging this digital wave to expand rapidly.
Also, digital infrastructure, powered by AI (artificial intelligence) and machine learning holds immense potential to revolutionise sectors like healthcare, education, and finance, driving India’s growth to new heights, added Trivesh.
Here are new-age tech companies where mutual funds hold notable allocations in their portfolio.
Source: ACEMF.

Company Name: Zomato
Sector: e-Commerce
Date of Listing: 23-Jul-2021
Return since listing (point-to-point): 105.3%
No. of MF schemes held: 341
Value of MF holdings: Rs 31,080 crore

Company Name: PB Fintech
Sector: Fintech
Date of Listing: 15-Nov-2021
Return since listing (point-to-point): 38.6%
No. of MF schemes held: 188
Value of MF holdings: Rs 10,641 crore

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Company Name: FSN E-Commerce Ventures
Sector: e-Commerce
Date of Listing: 10-Nov-2021
Return since listing (point-to-point): -50.3%
No. of MF schemes held: 129
Value of MF holdings: Rs 9,188 crore

Company Name: Delhivery
Sector: Courier Services
Date of Listing: 24-May-2022
Return since listing (point-to-point): -35.9%
No. of MF schemes held: 105
Value of MF holdings: Rs 6,695 crore

Company Name: One97 Communications
Sector: Fintech
Date of Listing: 18-Nov-2021
Return since listing (point-to-point): -47.5%
No. of MF schemes held: 81
Value of MF holdings: Rs 4,582 crore

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Company Name: Go Digit General Insurance
Sector: Insurance
Date of Listing: 23-May-2024
Return since listing (point-to-point): 9.1%
No. of MF schemes held: 57
Value of MF holdings: Rs 2,116 crore

Company Name: Honasa Consumer
Sector: Trading
Date of Listing: 07-Nov-2023
Return since listing (point-to-point): 12.8%
No. of MF schemes held: 56
Value of MF holdings: Rs 529 crore

Company Name: Netweb Technologies India
Sector: IT - Hardware
Date of Listing: 27-Jul-2023
Return since listing (point-to-point): 210%
No. of MF schemes held: 41
Value of MF holdings: Rs 784 crore

Company Name: CE Info Systems
Sector: IT - Software
Date of Listing: 21-Dec-2021
Return since listing (point-to-point): 4.9%
No. of MF schemes held: 37
Value of MF holdings: Rs 567 crore

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Company Name: OLA Electric Mobility
Sector: Automobile Two & Three Wheelers
Date of Listing: 09-Aug-2024
Return since listing (point-to-point): -18.5%
No. of MF schemes held: 37
Value of MF holdings: Rs 1,610 crore

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Company Name: RateGain Travel Technologies
Sector: IT - Software
Date of Listing: 17-Dec-2021
Return since listing (point-to-point): 145.5%
No. of MF schemes held: 37
Value of MF holdings: Rs 1,695 crore

Company Name: Brainbees Solutions
Sector: e-Commerce
Date of Listing: 13-Aug-2024
Return since listing (point-to-point): -22.5%
No. of MF schemes held: 36
Value of MF holdings: Rs 2,760 crore

Company Name: Easy Trip Planners
Sector: Travel Services
Date of Listing: 19-Mar-2021
Return since listing (point-to-point): 142.7%
No. of MF schemes held: 27
Value of MF holdings: Rs 11 crore

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Company Name: CarTrade Tech
Sector: Automobiles - Dealers & Distributors
Date of Listing: 20-Aug-2021
Return since listing (point-to-point): -18.9
No. of MF schemes held: 25
Value of MF holdings: Rs 921 crore

Company Name: Awfis Space Solutions
Sector: Diversified Commercial Services
Date of Listing: 30-May-2024
Return since listing (point-to-point): 84.3%
No. of MF schemes held: 22
Value of MF holdings: Rs 501 crore

Company Name: Zaggle Prepaid Ocean Services
Sector: Fintech
Date of Listing: 22-Sep-2023
Return since listing (point-to-point): 173.4%
No. of MF schemes held: 17
Value of MF holdings: Rs 357 crore

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Company Name: Unicommerce eSolutions
Sector: IT - Software
Date of Listing: 13-Aug-2024
Return since listing (point-to-point): -6.2%
No. of MF schemes held: 15
Value of MF holdings: Rs 188 crore


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