India’s top five mutual funds by Assets Under Management (AUM) invested only in five of the seventeen companies that made their debuts in the IPO heavy month of September, according to data from Prime monthly MF database.
These were Urban Company, iValue Infosolutions, Seshasaai Technologies, Atlanta Electricals, and Anand Rathi Share & Stockbrokers, with sizes in the ranging from Rs 560 crore to Rs 1,900 crore.
According to Yatin Singh, CEO of Investment Banking at Emkay Global Financial Services, “MFs are increasingly putting a size threshold for IPO participation. This is leading to any IPO below Rs 550 – 600 crore not generating the level of MF participation when compared to recent past.”
Four of the top five mutual funds subscribed to Urban Company’s Rs 1,900 crore IPO. SBI Funds Management bought 1.91% stake in the company, ICICI Prudential AMC, HDFC AMC and Nippon Life India AMC bought around 0.3% stake each.
The company was top new entrant at an industry-level also with 47 mutual funds investing Rs 983.77 crore for a 4.11% stake. After closing 62% higher on the listing day, the stock erased all its gains and has fallen nearly 15% from September 19.
ICICI Prudential bought a 4.13% stake in technology services & solutions aggregator iValue Infosolutions for Rs 62 crore. The stock has risen 2.4% since listing. Meanwhile, HDFC AMC bought a 1.51% stake in Atlanta Electricals for Rs 91.8 crore, ICICI bought 0.6%, and Kotak bought 0.4%. The stock has risen 13% on top of nearly 14% listing gains.
Overall, the mutual fund allotment has fallen in the 50% of the issue size reserved for QIBs has fallen from 43% in the previous financial year to 35.6% this fiscal. This coincides with a fall in average issue size during this period to Rs 1,478.10 crore compared to Rs 2,081.88 crore in the financial year ended March 31, 2025.
Swarup Mohanty, Vice Chairman & CEO at Mirae Asset Mutual Fund said: “This is largely because the number of AMCs has gone up, and, at the end of the day, the allotment happens at the issuer’s discretion. With the pace of new issuances picking up this year, AMCs are being more selective. From our side, we continue to see value across the market, including new-age tech companies.”