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To Buy or Not to Buy

The companies that got listed during March and April have received mixed response from fund managers. While few of them received an overwhelming response, most others have failed to impress the managers

The companies that got listed recently during March and April have received mixed response from fund managers. While few of them received an overwhelming response, most others have failed to impress the fund managers.

Jet Airways India Ltd

Only four funds invested in Jet Airways initially. By April end, the number of funds went up to 11, due to the appreciation in its stock price. Though the response from mutual funds has not been too great, Reliance Vision had been very bullish on the stock. In April, the fund had invested 9.41 per cent of its assets in the stock, making it the second biggest holding of the fund. In May, the fund reduced its exposure to the stock to 6.57 per cent. HSBC Equity is the other fund to have invested a sizeable part (3.39 per cent) of its assets in the stock. Interestingly, both these funds have bought most of their holdings in the secondary market during April, rather than investing in the IPO in previous month. The count of invested funds has gone up to 14 by May-end, a noteworthy addition being HSBC India Opportunities Fund (4.02 per cent of assets).

UTV Software Communications Ltd

As per the portfolios of March 2005, six funds had invested in the stock, of which two funds-Alliance Buy India and Alliance New Millennium have held the stock in their portfolios since March 2000, though in small proportions. Reliance Media & Entertainment Fund invested 9.04 per cent of its assets in the stock. The fund has the highest exposure in terms of number of shares, which is in excess of 1.25 lakh shares. But as the stock languished on the bourses, three of these six invested funds got out of the stock in April. However, the number of funds is back to six as per the portfolios for May 2005.

Emami Ltd

The stock got listed on March 24, 2005. During the first month of listing, 15 funds had invested in the stock. Here again, two funds of SBI Mutual Fund have shown notable interest in the stock. Magnum FMCG, one of the two FMCG funds to invest in the stock, invested close to 6 per cent of its assets in the stock, while Franklin FMCG invested 0.53 per cent of its assets in the stock. Magnum Emerging Businesses Fund allocated 1.26 per cent of its assets to the stock. Franklin India Prima, which added the stock to its portfolio during April 2005, has the largest holding in the stock in terms of number of shares (over 6 lakh shares). Franklin India Flexi Cap is the other fund to have added the stock to its portfolio during April 2005.

Gateway Distriparks Ltd

The stock found a place in the portfolios of 23 funds during the first month of its listing. On the basis of percentage of net assets, Kotak Opportunities leads with an allocation of 3.26 per cent to the stock. At the fund house level, the stock has attracted Franklin Templeton the most. Franklin Templeton accounted for close to 76 per cent of the total investment by Indian mutual funds in the stock as per the portfolios in March. As many as nine funds of the fund house (five tax planning funds and four diversified equity funds) had invested in the stock. Together, they held in excess of 49 lakh shares, valued at about Rs 55 crore in March. Tata Services Industries Fund added the stock to the portfolio during April 2005.

Jaiprakash Hydro-Power Ltd

The stock managed to get a good response from Cholamandalam Mutual Fund and LIC Mutual Fund. Four funds from each fund house invested in the stock. Apart from them, only one fund of Reliance Mutual Fund has found the stock attractive during April, and the trend has continued in May as well.

3i Infotech Ltd

3i Infotech, which got listed on April 22, 2005, failed to attract mutual funds. Only two funds from SBI Mutual Fund-Magnum IT and Magnum Midcap invested in the stock. With a share of 4.96 per cent as per the portfolio for the month of May 2005, it figured in the top 10 holdings of Magnum IT. However, Magnum IT is the only technology fund to have invested in the stock.

Gokaldas Exports Ltd

The IPO of Gokaldas Exports generated tremendous response from fund managers. As per the portfolios for April, when it was listed, as many as 41 funds from 16 fund houses had invested in the stock, with five of them investing 3 per cent or more of their net assets. Thirty-five diversified funds, five tax planning funds, and one FMCG fund bought the stock. Prudential ICICI Mutual Fund and Franklin Templeton Mutual Fund have shown good interest with six funds of each fund house investing in the stock.

Shringar Cinemas Ltd

The stock failed to attract big investments from the mutual funds. Out of the 14 funds that invested in the stock in April, four belonged to Cholamandalam Mutual Fund and three each to ING Vysya and Sundaram Mutual Fund. However, by May-end, the number of funds has come down to seven, with all the Cholamadalam funds exiting the stock. At present, none of the funds has invested more that one per cent of its assets in the stock.