How did MFs fare as anchor investors?

In the last few months, we have seen mutual funds increasingly appear as anchor investors in a plethora of new issues to hit the IPO market. Ever wondered what is their track-record? An analysis of some popular IPOs in the last year shows that MF managers have a mixed record. The concept of anchor investors was introduced in 2009 by SEBI. The idea behind the move was that the participation of institutional investors in IPOs before they hit the capital markets would infuse confidence in individual investors. Often, the volume and value of anchor subscriptions serve as an indicator of the soundness of the offer and anchor subscriptions serve as a guideline on issue pricing and help creating interest among Qualified Institutional Buyers (QIBs), too. Equity funds flush with cash, thanks to massive inflows, have emerged as a regular player in the anchor book portions of recent IPOs. Close-ended schemes, mid- and small-cap funds as well as big funds have been cherry-picking offers. We evaluated the returns on these IPOs, both on listing and after a 30-day period (anchor investments are locked in for a month), to examine how they fared. An analysis of 21 IPOs, which saw MFs as anchor investors, in the past 12 months shows that 12 new offerings were up 2-52 per cent at the end of listing day, while 9 were down 1-25 per cent on listing day. Thirty days later, the tally looked better, with 13 stocks up while 8 were down. Equitas Holding, which is the country's first small finance bank play, saw a good debut when its shares got listed last Thursday. Franklin Templeton Asset Management (