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Edelweiss mutual fund: Edelweiss mutual fund to restrict flows into recently listed IPO fund

Mumbai: Edelweiss Recently Listed IPO Fund, a scheme that invests in newly-listed firms or those who plan to hit the capital markets quickly, will restrict investments to a most of ₹1 lakh per day per investor from February 1.

The scheme, launched as a closed-end scheme in February 2018 with a maturity of 1,222 days, went open-ended in May 2021 when it had assets of ₹522 crore. With the property doubling to ₹1,091 crore as of December 2021, the fund house has determined to put restrictions on flows.

“After quick growth in the fund AUM since launch, we want to take this opportunity to review portfolio liquidity and also look at the IPO pipeline in coming months,” stated Radhika Gupta, CEO, Edelweiss Mutual Fund.

She stated the fund has reached a dimension the place it’s prudent to restrict inflows.

The scheme has 75% of its portfolio in mid- and small-cap shares with the stability in large-cap names. The prime holdings of the fund are Sona BLW, Gland Pharma and MTAR Technologies. Given the sharp run within the markets, many fund managers consider valuations are wealthy, particularly within the mid and small cap area the place there’s not sufficient liquidity.

The scheme beat its benchmark over 1- and 3-year durations, returning 57.69% and 36.94% as in contrast to S&P BSE 500 TRI, which returned 33.45% and 21.49%, respectively.

“Many IPOs that happen and are attractive are of companies with market capitalisation less than ₹10,000 crore and are mid and small caps. Since liquidity is low and the theme narrow, it is important for a fund house to put a cap on flows to protect existing unitholders,” stated Rupesh Bhansali, head (distribution), GEPL Capital.

He believes traders who can take volatility with a timeframe of 5-10 years can put money into a staggered method on this fund.

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