Most initial public offerings (IPOs), in the current previous, turned out to be a prosperous investment for investors. From the Zomato IPO to the IPOs of Happiest Minds, Burger King, Route Mobile to Clean Science and lots of other people, the list of major IPOs appears to be ever expanding. Several thousand crores have currently been raised by numerous providers and start off-ups and more is but to come.
But, following applying for IPOs, there is no assurance that the investor gets the allotment. More so, as the IPO troubles are having oversubscribed numerous instances more than. For instance, lots of investors would be waiting to verify the Devyani International IPO allotment status. As an investor, if you nevertheless want to take an exposure to the not too long ago-listed IPOs, there is a way out.
Edelweiss Maiden Opportunities fund-Series 1 (a closed ended scheme) has been converted into Edelweiss Recently Listed IPO Fund (a open ended scheme) and is now open for investment (effective from June 29, 2021). The fund holds the shares of the not too long ago listed providers and provides investors an chance to hold them in a single mutual fund scheme.
In an exclusive interview with Sunil Dhawan of FE Online, Radhika Gupta, MD & CEO of Edelweiss Asset Management Limited shares insights about the Edelweiss Recently Listed IPO Fund, how investors stand to advantage and the watchouts ahead of investing in the fund. Excerpts:
If an investor fails to get allotment in an IPO, how does it support by investing in Edelweiss Recently Listed IPO Fund?
Edelweiss Recently Listed IPO Fund aims to participate in not too long ago and upcoming listed IPOs on the index stock exchanges. The fund participates in choose IPOs through anchor or QIB route and might also obtain these providers following listing from the secondary marketplace if they are obtainable at an appealing price tag.
Many retail investors miss out on having allotment in IPOs due to heavy more than-subscriptions, they also miss out on getting fantastic providers following listing due to lack of analysis and miss out on post listing gains. By investing in this fund the investor need to have not be concerned about access to fantastic IPOs as the fund does it for her. The portfolio holds someplace involving 30 to 40 stocks at any offered point.
As a mutual fund residence, how does the allotment take place, specially in the case of more than-subscription?
The allotment depends on a case to case basis. There is no assured allotment to any category of investors in an IPO. However, the fund aims to get exposure into a fantastic firm through several methods – Anchor and QIB quota for the duration of IPO and also kind a secondary marketplace following the listing.
Currently, it is the IPO season and most of them are listing with hefty gains? Will all not too long ago listed providers continue to be held in the portfolio and how will it be decided no matter if to exit/ trim or improve exposure to these IPO providers?
The fund follows a rigorous course of action whilst picking IPOs to invest in. The fund does not invest in just about every IPO that comes for listing. The typical holding period in a fantastic IPO following listing has been about 2 years, which is a affordable period to advantage from post-listing gains from these IPOs.
Exiting or growing exposure to such providers is based on pure basic evaluation of the firm and the worth it can add to the portfolio. It also depends on other relative possibilities that might come across more than the life of the fund.
Any vital watchout that an investor requires to retain an eye on?
One vital point which investors really should retain in thoughts whilst taking into consideration this fund is that it is not a fund that generates returns from listing gains of IPOs. The key objective of the fund is to invest in fantastic new-age providers that are having listed and have fantastic possible to develop more than a period. The aim is to produce the maximum return from post listing gains by holding these providers for a affordable period following their listing.