Seventeen domestic mutual fund houses, through a total of 39 schemes, have invested in the anchor allocation round of Tata Technologies IPO, acquiring shares worth Rs 355 crore. The IPO, which raised a total of Rs 791 crore from 67 investors, opened for subscription, marking Tata Group’s first public offering in nearly two decades. The funds were raised at the higher end of the Rs 475-500 price band.
A notable highlight of the anchor allocation round was the significant participation of domestic asset management companies (AMCs). A total of 70,99,980 shares, accounting for 44.88% of the overall anchor quota, were subscribed by these AMCs. Among them, SBI Mutual Fund and ICICI Prudential Mutual Fund made the highest investments, each contributing Rs 42 crore. SBI allocated shares through its Technology Opportunities Fund (Rs 34 crore) and Multi Asset Allocation Fund (Rs 8 crore), while ICICI Prudential invested via three schemes – large & mid-cap, innovation fund, and midcap fund.
Other prominent AMCs that participated in the anchor allocation round include Aditya Birla Sun Life Mutual Fund, Franklin Templeton India, and Nippon India Mutual Fund, with investments of Rs 32 crore each.There were also seven schemes from Edelweiss Mutual Fund that acquired shares worth Rs 15 crore.
The anchor allocation letter revealed that three multi-cap funds, as well as two Equity Linked Savings Scheme (ELSS) funds, took part in the round. Furthermore, seven schemes focused on the mid-cap segment invested in the IPO.
However, it is worth noting that certain mutual fund houses, such as HDFC Mutual Fund, Tata Mutual Fund, and UTI Mutual Fund, did not participate in the anchor allocation round of Tata Technologies IPO.
Overall, the participation of mutual fund houses in the anchor allocation shows their confidence in Tata Technologies and their positive outlook on the growth opportunities in the engineering services sector. The investments made by these AMCs highlight their long-term investment perspective and belief in the value proposition of the IPO.
1. What is an anchor allocation in an IPO?
Anchor allocation refers to the allotment of shares to institutional investors, including mutual funds, before the initial public offering (IPO) opens for subscription. The purpose of anchor allocation is to attract and secure large investments from reliable and long-term institutional investors, which can enhance the credibility and potential success of the IPO.
2. Why do mutual fund houses invest in IPOs?
Mutual fund houses invest in IPOs to diversify their portfolios and capitalize on potential growth opportunities. IPOs provide an opportunity to invest in a promising company at an early stage and potentially benefit from its future success. Participating in IPOs also allows mutual fund houses to cater to the investment preferences of their investors, who may be interested in IPO investments.
3. Why did some mutual fund houses not participate in the anchor allocation round?
Mutual fund houses have internal processes and criteria for selecting IPOs in which they want to participate. Factors such as the fund’s investment mandate, investment strategy, risk appetite, and assessment of the IPO’s potential may influence their decision to invest or skip investing in the anchor allocation round.