Mutual funds snap up Rs 3,380 crore shares in 11 IPOs in December, Medplus attracts more money

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© Ira Puranik Mutual funds snap up Rs 3,380 crore shares in 11 IPOs in December, Medplus attracts more money

Equity mutual fund schemes acquired more than Rs 3,000 crore worth of shares in the initial public offerings (IPO) launched in December despite negative sentiment in the secondary market. In fact they turned out to be a strong supportive factor for the secondary market as well, when the market was facing selling pressure from foreign institutional investors (FIIs).

Mutual funds were net buyers of more than Rs 17,000 crore in the equity market in December on top of Rs 16,000 crore of buying in the previous month, while domestic institutional investors acquired more than Rs 31,000 crore worth of shares in the last month of 2021, the highest monthly buying since March 2020.

In the same month, foreign institutional investors had net sold nearly Rs 35,500 crore worth of shares.

Overall, equity and equity-oriented mutual fund schemes attracted record monthly inflow in December. Investors poured in more than Rs 25,000 crore into equity schemes against Rs 11,615 crore of buying in the previous month despite uncertainties brought on by the Omicron variant of the COVID-29 virus. Monthly flow through systematic investment plans (SIPs) too were at a record of Rs 11,306 crore in December, compared with Rs 11,005 crore in November.

The benchmark indices gained 2 percent in December but were down more than 6 percent from the record high of October 19. Overall market sentiment began picking up towards the end of December, which is why there was positive close in the market.

“Despite the concerns over the Omicron variant of the coronavirus and the surge in the number of Covid cases in the country which has triggered a third wave of the pandemic, the growth outlook over the long term remains strong. Also, the perception that despite intermittent corrections the markets would continue to surge would have prompted many investors to make the most of the recent dip in the markets,” said Himanshu Srivastava, associate director and manager, research, at Morningstar India.

Moreover, “relatively lower returns from traditional investments have also made equity mutual funds an attractive investment destination for investors. Additionally, with the SIP book growing consistently, equity-oriented funds have been receiving robust flows since March 2021,” he said.

Mutual funds deployed Rs 3,380 crore in fresh issuances launched in December 2021. “The additions were Medplus Health (Rs 1,300 crore), CMS Info Systems (Rs 300 crore), Metro Brands (Rs 300 crore), Tega Industries (Rs 280 crore), RateGain Travel (Rs 250 crore), Anand Rathi Wealth (Rs 250 crore), CE Info Systems (Rs 240 crore), Data Patterns (Rs 210 crore), Supriya Lifescience (Rs 130 crore), Shriram Properties and Star Health,” said Edelweiss Alternative Research in its report dated January 13.

Nearly Rs 16,800 crore worth of IPOs were launched in December including Star Health & Allied Insurance, Medplus Health, Metro Brands, CMS Info Systems and CE Info Systems. In total, 65 companies raised more than Rs 1.3 lakh crore via public offers in 2021.

Medplus Health and Metro Brands shares were acquired by six mutual funds, while CE Info Systems, Anand Rathi Wealth, RateGain Travel Technologies and CMS Info Systems were bought by three mutual funds. Tega Industries was seen in four mutual funds.

Among the already listed stocks, KPR Mill, KEC International, Graphite India, ABB, Coforge, Motherson Sumi Systems, Max Financial, Whirlpool India, Godrej Consumer Products, Gateway Distriparks, Navin Fluorine International, Tata Communications, Vedanta, Century Textiles, Siemens, IDFC, ICICI Prudential Life, Indus Towers, Alembic Pharma and Cadila Healthcare were newly added by mutual funds during December.

However, they completely exited several stocks including SIS, Jyothy Labs, Hathway Cable, Thermax, Indiabulls Housing Finance, RBL Bank, Nykaa, RITES, Tarsons Products, Deepak Nitrite, Force Motors, Krsnaa Diagnostics, Gujarat Pipavav Port, Sterlite Technologies, Vodafone India, Dish TV, Raymond, Aarti Industries, Tata Chemicals, DLF, HDFC Life Insurance and Shree Cement.

Note: Every scheme has bought/sold stocks among those mentioned in the above list.

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