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AMCs invested in IPO market to encash growth opportunities, says Ventura Securities

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"During this IPO season, mutual funds are taking advantage of the short term windfall gains that IPOs are currently delivering," said Ventura Securities in its blog post.

AMCs invested in IPO market to encash growth opportunities, says Ventura Securities
At a time when Indian equities look a bit inflated, asset management companies (AMCs) are pumping money into the IPOs to take advantage of the growth opportunities the primary market offers.
"During this IPO season, mutual funds are taking advantage of the short term windfall gains that IPOs are currently delivering," said Ventura Securities in its blog post.
In the last year, the total issue size of all the IPOs was over Rs 43,000 crore, according to the brokerage firm. A whopping 1,051 schemes have applied for the IPOs, of which only 582 schemes are currently holding on to those IPOs’ shares. This implies that about 45 percent of the schemes did not hold on to the shares of the IPO.
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After analysing the top 10 asset management companies who have applied for a maximum number of IPOs in the last year, the brokerage came to a conclusion that Sundaram Asset Management Company has the highest number of schemes that have invested in IPOs and also has the highest number of schemes that still hold shares of that IPO.
Asset management companies that followed Sundaram’s lead, were SBI, Birla, ICICI, Axis, Kotak, Nippon, Invesco, HDFC, Principal and Others. All other asset management companies that have subscribed to the IPOs have been clubbed together in ‘Others’.
Meanwhile, Nippon was the most aggressive in IPO investment among the top 10 asset management companies considering it applied for 23 IPOs out of the 36 released in the last year, Ventura Securities pointed out.