With the onset of summer, it is not just the weather that is heating up. The story of the first quarter in Indian capital markets is IPOs. While the secondary market is lacklustre, the primary market is seeing huge interest and the issues are getting oversubscribed several times.
Patni Computer, the sixth biggest software services exporter, was one of the first IPOs off the block, from the not-so-sexy-today technology sector. While the issue was oversubscribed 22 times, only one technology fund-Magnum IT-subscribed to the IPO. Magnum IT has 1.78 per cent exposure to Patni.
Though tech funds were conspicuous in their absence, Patni did manage to attract attention from other category of funds, especially the diversified equity funds and MIPs. In all, 26 mutual fund schemes (excluding UTI schemes) participated in the IPO. These include 11 diversified equity funds, eight MIPs, two tax-planning funds, two equity-oriented hybrid funds and two asset allocation funds.
HSBC Equity fund alone held more than half (4.8 lakh shares) of the total number of shares allotted to the mutual funds. Next to it was Birla MIP and Templeton IGF, which got 50,000 and 44,250 shares, respectively.
In terms of per cent of net assets, the three funds from SBI had the higher exposure in Patni as on February 29, 2004 - Magnum Contra (3.66 per cent), Magnum Taxgain (1.83 per cent) and Magnum IT (1.78 per cent). This was closed followed by HSBC Equity, in which Patni accounted for 1.3 per cent of its total portfolio. The IL&FS Global Opportunity fund, which was recently converted to a diversified equity fund from a tech fund (erstwhile IL&FS e-COM), had the lowest exposure in the company (0.16 per cent of the portfolio).