Amid heavy redemption, mutual funds put in big money in 4 IPOs and made a killing

NEW DELHI: Mutual funds pumped in some Rs 1,238 crore in four IPOs in January as they entered and exited a few smallcap stocks during the month, data showed.

Fund managers were seen subscribing to shares worth Rs 927 crore in the IRFC IPO. They bought Rs 143 crore worth of shares in Indigo Paints, Rs 117.82 crore in Home First Finance IPO and Rs 50 crore in the Stove Kraft offering. The four IPOs hit the market during the second half of January.

Indigo Paints, which was sold between January 20 and 22, got listed at a 75 per cent premium to its issue price of Rs 1,490. Today at Rs 2,580, it is up 73 per cent from the issue price.

IRFC, which got listed at a 4 per cent discount, is trading below the issue price of Rs 26 at Rs 25.85. At its current market price of Rs 510.80, Stove Kraft is up 32.67 per cent over its issue price of Rs 385. Home First Finance is up 4 per cent from its issue price of Rs 518. The stock had debuted at Rs 612, a 19 per cent premium.

The funds invested in the IPOs actively as equity-oriented schemes saw heavy redemption pressure, leading to a net outflow of Rs 12,194 crore in January. Equity-oriented schemes saw their total asset under management (AUM) dip by 2.3 per cent to Rs 9.15 lakh crore during the month.
Meanwhile, mutual funds bought into several new stocks such as Wendt (India) with the purchase of Rs 16.55 crore worth of shares. They also bought into Sirca Paints (Rs 10.04 crore), Balaji Amines (Rs 4.10 crore), Kanchi Karpooram (Rs 3.70 crore) and Mangalore Chemicals (Rs 3.27 crore) in small quantities.

They bought shares of Kirloskar Industries and subscribed to the rights issues of Mold-Tek Packaging and L&T Finance Holdings. The quantum was negligible, less than Rs 1 crore each.

Meanwhile, these funds exited four smallcap stocks, namely Acrysil (down Rs 3.16 crore), NR Agarwal Industries (down Rs 51 lakh), Technocraft Industries (down 18 lakh) and BL Kashyap & Sons (Rs 15 lakh).