• OUTLOOK ARENA
  • VIEWS ON NEWS
  • APRIL 24, 2000

Mutual funds: Whither IPOs!

The last 6 months have witnessed a wave of mutual fund IPOs (initial public offerings). The IPOs, a large number of which were technology-related, sought to capitalise on the boom in equity markets. With the boom in equity markets turning to bust in the last few weeks, the IPOs have fallen suit.

Every other mutual fund has launched an IPO over the past few months. A large number of these IPOs were launched with the objective of capitalising on the explosive growth in the software sector. And investors who were witnessing software stocks hitting all-time highs invested in mutual fund IPOs in a big way, believing that these IPOs would also do well just like the underlying stocks.

Open-ended,
Growth IPOs
Inception
date
NAV
(Rs)
Last
week
Last
month
Since
inception
Alliance Basic Industries Fund (Growth) Dec. 1999 8.5 -5.4% -3.6% -4.4%
Alliance Buy India Fund (Growth) Dec. 1999 7.2 -10.9% -13.2% -28.8%
Alliance New Millennium Fund (Growth) Dec. 1999 9.6 -19.2% -33.5% -37.3%
IL&FS eCOM Fund (Growth) Dec. 1999 7.8 -22.9% -34.3% -42.6%
Kothari Pioneer Internet Opport. Fund (Gr) Feb. 2000 8.7 -6.7% 0.0% -9.4%
Prudential ICICI Technology Fund (Growth) Jan. 2000 6.9 -18.1% -29.9% -29.9%
Sun F & C Emerging Tech. (Gr) Feb. 2000 7.7 -14.1% 0.0% -9.8%

Given the state of the equity markets currently, most of the investors who had rushed to enter mutual fund IPOs, are now having second thoughts about their investments. These IPOs are now trading well below their par values (Rs 10) and investors are exiting from these schemes, just as quickly.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407