India's mutual fund industry has shown robust participation in newly listed companies, with total investments amounting to over Rs 5,294 crore across recent initial public offerings (IPOs) in the April-June quarter, a report said on Tuesday.
A majority of these new entrants fall under the small-cap category, with only one categorised as a midcap, stock broking platform Ventura said in its report.
According to the report, in small-cap IPOs, mutual fund houses have invested Rs 1,351 crore in Ather Energy, Rs 679 crore in Schloss Bangalore, Rs 495 crore in Aegis Vopak Terminals, Rs 398 crore in Belris Industries, Rs 387 crore in Oswal Pumps, Rs 357 crore in Ellenbarrie Industrial Gases, Rs 241 crore in Kalpatru, and Rs 55 crore in Sambhv Steel Tubes during the quarter.
The fund houses allocated Rs 1,331 crore for HDB Financial Services' IPO, which was a midcap company.
Meanwhile, among the top 335 equity schemes across the top 20 Asset Management Companies (AMCs) (by Asset under management) for the January–March quarter, 90 per cent of schemes outperformed the Nifty 50 TRI, highlighting the index's relative underperformance during the period.
However, only 41 per cent of schemes outperformed their respective category benchmarks, indicating tighter competition and more selective alpha generation, the report said.
According to the report, the Invesco MF led on benchmark outperformance, with 13 out of 16 schemes (81 per cent) outperforming — the highest success rate among peers.
Meanwhile, Mirae, Kotak, Nippon, Edelweiss, Canara Robeco, and Aditya Birla SL MF saw all their equity schemes beat the Nifty, showcasing consistent delivery across portfolios, the report highlighted.
As per the report, larger fund houses like ICICI Prudential MF and Aditya Birla SL MF had the highest absolute number of outperforming schemes against the Nifty, but benchmark outperformance remained more dispersed across mid-sized players.
Small-cap funds witnessed a 20 per cent surge in assets under management (AUM), the highest among all categories, the report noted.
This sharp growth marks a significant reversal, as small-cap funds climbed from the bottom of the rankings in the previous quarter to take the top spot, highlighting renewed investor confidence in high-growth, high-risk segments.
According to the report, mid-cap (17 per cent) and multi-cap (16.5 per cent) funds also registered robust growth, underscoring a broader market rally and increased interest in diversified exposure beyond large-cap names.
The rise in AUM across these categories suggests that investors are willing to move down the market-cap curve in search of better returns, driven by favourable valuations, improved earnings visibility, and strong flows from domestic retail investors, the report stated.
(With inputs from IANS)
