Top four mutual funds lap up this midcap stock listed in October

The top four mutual funds by AUM are ICICI Prudential Mutual Fund, HDFC Mutual Fund and Reliance Nippon Life Asset Management and Aditya Birla Sunlife Mutual Fund.

Written by Sushruth Sunder

Updated: November 17, 2017 16:30 IST

Mutual fund equity, Mutual fund equity saving schemes, Equity savings funds, post-tax returns, bank fixed deposits

Equity savings funds became popular after the 2014 Union Budget when the government increased the holding period of debt mutual fund from one year to three years to qualify for long-term capital asset.

Top four mutual funds by assets under management have added Godrej Agrovet Ltd to their portfolio in the month of October, a scrip which debuted on the bourses last month. The top four mutual funds by AUM are ICICI Prudential Mutual Fund, HDFC Mutual Fund and Reliance Nippon Life Asset Management and Aditya Birla Sunlife Mutual Fund. Notably, Godrej Agrovet Ltd, an animal feeds player came out with its IPO for Rs 1,157 crore on October 4th. The company had set a price range of Rs 450-460 per equity share for its public offer. Interestingly, Godrej Agrovet IPO got oversubscribed 95 times, post three days of heavy bidding, backed by strong demand from institutions, as the QIB portion was oversubscribed by 151 times!

According to a report by IDBI Capital, ICICI Prudential has invested has invested 0.04% of its total assets into the shares of Godrej Agrovet, while HDFC Mutual Fund has invested 0.02%. Reliance Nippon Life Asset Management too has taken a 0.02% exposure to the shares, while Aditya Birla Sunlife Mutual Fund has put in 0.04% of its overall AUM into the shares. Interestingly, Godrej Agrovet features in the top 10 additions in the month of October, for these four firms.

Godrej Agrovet Ltd shares closed at Rs 538, up by more than 1.2% since yesterday’s close on NSE. Notably, the shares have risen by more than 16% as compared to issue price of Rs 460. Many brokerages had given a subscribe rating on the issue. IDBI Capital had noted, “Godrej Agrovet’s (GAV) IPO provides a good investment option given that it has high quality secular business franchisee with competitive advantages in a growing industry with high return ratios. GAV’s operates in business segments which are either underpenetrated (animal feed) or in high growth areas such as dairy, poultry, agri-inputs.”

Similarly, Angel Broking had siad, “At 33.5 times, GAVL does not appear expensive as PE multiple is in the mid of this range and ROE is at the higher end of the range. We assign a subscribe rating to this IPO considering its diversified business profile, decent margins, strong return ratios, healthy balance sheet and strong history of its parent.”