Something similar happened with the online food aggregator’s blockbuster listing
. The most anticipated Initial Public Offering of the year saw its value rise by over 65 percent on the day it hit the market on July 23.
By August, those gains for the IPO’s anchor investors had exceeded 80 percent. For 186 anchor investors, which included 19 domestic mutual funds, these were mouth-watering returns.
In August, when the one-month lock-in period for anchor investors came to an end, many rushed to book partial gains in the stock to capitalize on the gains. Of the 19 mutual funds that participated in the Zomato IPO’s anchor allotment in July, eight became sellers of the stock in August, data compiled by East India Securities showed.
Prominent names that sold stocks in August were four of India’s six largest mutual fund houses by assets under management – ICICI Prudential MF, HDFC MF, Nippon India MF and Kotak MF. Four mutual funds accounted for 70 per cent of Zomato’s shares sold by mutual funds during the month.
market participants Say partial profit booking The outlook for them can be indicated by these funds. limited upside In the short term after strong gains since listing. In fact, Zomato’s shares failed to build on the strong listing gains it had seen.
However, some mutual funds, despite participating in anchor issues, showed confidence in the stock by buying additional shares in the secondary market.
Data shows that out of 19 mutual funds that bought Zomato shares in the anchor issue, six added some 21.8 million shares of the company to their portfolio in August. Among the major mutual funds that were its buyers zomato stock Aditya Birla Sun Life MF, Axis MF and Mirae Asset Management were among those in August.
The conviction of six mutual funds that bought the stock in August echoed the optimism shown by foreign and domestic brokerage firms over the past few weeks.
Brokerage firm ICICI Securities started coverage of the stock last month with a price target of Rs. 220, the highest ever target on the Street, and a buy call.
Brokerage firm UBS Securities India, which also gave a buy recommendation on the stock, suggested that the company could generate revenue at 40 per cent per annum in the coming years.
Brokerage firm Goldman Sachs said in a recent note, “We believe investors will be willing to pay a premium valuation for Zomato as long as the company is able to maintain an advanced growth profile and a dominant market position. ”