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Mint
17-07-2025
- Business
- Mint
India's IPO boom cools in 2025—Can the market regain its momentum?
After a blockbuster 2024 that saw Indian companies raise an all-time high of ₹1.69 trillion through initial public offerings, the euphoria around IPOs appears to be softening in 2025. The mainboard segment, once flooded with enthusiastic bidders, is now witnessing lukewarm interest, subdued subscription levels, and sharply lower listing gains. Meanwhile, the SME IPO segment is showing some buoyancy. Activity remains strong, but analysts warn that the surge may be misleading, driven more by speculative enthusiasm and small issue sizes than by fundamental investor conviction. As several high-profile IPOs prepare to debut in the coming months, all eyes are on whether India's primary market can rekindle its fire in 2025. India's IPO story has seen a sharp rise since 2019, with a dramatic increase in fundraising—from ₹12,985 crore in 2019 to ₹1.19 trillion in 2021. After two relatively slower years, 2024 set a new benchmark with ₹1.69 trillion raised, according to Prime Database. But 2025 has brought a reality check. 'It's hard to put a number to where the year will end," said Pranav Haldea, managing director, Prime Database Group. 'At the start of 2025, expectations were high for all-time record IPO activity. But early challenges—like tariffs and geopolitical tensions—led to volatility in the secondary market until March, keeping IPO activity muted. With markets picking up from April, IPOs have followed suit. Unless there is a major negative event, the second half looks promising, with a strong pipeline ready to launch." Also read Who climbed the ladder, who ceded ground—inside Amfi's market cap rejig The cooling trend in the mainboard space reflects broader shifts in sentiment, triggered by geopolitical tensions and tariff uncertainties. 'In my opinion, this is not a reflection of overvaluation but more of an overheated/outperforming segment taking a breather," said Kush Gupta, director at SKG Investment & Advisory. 'During much of 2024, IPO subscriptions were through the roof, but in the last 6-8 months we have seen a lot of volatility." He added: 'Nifty has fallen approximately 10% and also then recovered during this period. This has led to a shift in investor sentiment. Investors are now choosing safer options like mutual funds, gold, and bonds. IPOs, where listing gains can be a coin toss, are attracting less interest than last year." Investor interest in 2025 has clearly split across segments. While SME IPOs are seeing some oversubscription, the mainboard is struggling to attract bids. AMint analysis reveals that only 19.2% of mainboard IPOs have seen an overwhelming response of 80-times, while 38.5% remain in the 1–10 times subscription range. But Haldea points out, 'SME IPOs are small in size, so even high oversubscription isn't very meaningful. What stands out is the surge in retail participation—about one lakh applications per IPO—driven by last year's strong listing gains. Unlike the mainboard, the SME market is dominated by individual investors, with little institutional presence." One of the biggest shifts this year is the steep fall in listing day gains. Median listing gains for mainboard IPOs have dropped to just 8%, while SME IPOs have seen a sharper decline to 4.6%—a far cry from 2024's 17.3% and 39.3%, respectively. 'The sharp drop in median listing gains to just 8% in 2025 reflects both a valuation correction and a broader sentiment shift," said Harshal Dasani, business head at Invasset PMS. 'The correction is healthy and expected." He added, 'The market is maturing. Investors aren't chasing hype; they're rewarding quality. If issuers adapt to this more rational environment, the IPO engine can regain strength. Gone are the days of blind subscription frenzy—clarity, not chaos, will define the next cycle." Also read Anthem IPO: High growth, low R&D—is this a long-term bet or a risky buy? The continued frenzy in the SME space is raising concerns about speculative behaviour and governance risks. 'Some SMEs do have solid financials and scalable models. However, the speculative undercurrent is hard to ignore," said Dasani. 'Sebi has raised red flags, citing risk of manipulation and poor post-listing governance. The frenzy resembles a gold rush—where some gems exist, but many are chased for the thrill." 'The SME segment's oversubscription boom reflects India's thriving MSME growth but also hints at speculation, as many investors chase quick gains over long-term fundamentals," said Ranjit Jha, founder & CEO, Rurash Financials. Gupta also warned against excessive hype. 'While there is a hint of speculation in the SME segment driving this phenomenon, one also has to understand what the IPO market has become lately." Despite the slowdown, the IPO pipeline remains robust. As of July, IPOs worth over ₹1 trillion have received Sebi approval, while another ₹1.4 trillion is awaiting clearance. 'This year, with macro headwinds, tighter liquidity, and more discerning institutional participation, investors are expecting sustainable growth stories rather than just momentum bets," said Jha. 'However, the current situation is more of weak investor sentiment due to global uncertainties and the impending tariff deadlines. Q1 earnings are also in focus due to high expectations."
Mint
15-07-2025
- Business
- Mint
Why are fund of funds seeing a spike in investor flows?
Fund of funds (FoFs), which invest in other domestic funds, received ₹8,647 crore of investor inflows in June, according to monthly data shared by the Association of Mutual Funds in India (Amfi) recently. In the preceding month, FoFs saw net inflows of ₹5,829 crore. What has sparked this renewed interest? Here's what experts say Income plus arbitrage FoFs Experts attribute the increase in inflows to the innovative products that are being launched in this category. Several fund houses have launched income plus arbitrage FoFs, which invest in a combination of a debt fund and an arbitrage fund. These FoF schemes put 65% of the portfolio in debt and the remaining 35% in arbitrage funds – the exact reverse of what pure arbitrage funds do (35% debt and 65% arbitrage). The idea behind income plus arbitrage FoF is to limit arbitrage exposure to 35% as debt investors may not be comfortable with arbitrage yields, which tend to move a lot more than debt yields. Also read | What's changed for India's mutual fund industry in FY25. Here are the top trends Due to the new tax rules, FoFs now have the benefit of a long-term capital gains tax rate, that is gains from FoFs held for more than 24 months will be treated as long-term capital gains and taxed at 12.5%. There is still one caveat, the FoFs' underlying should not be more than 65% in debt funds, to avail the LTCG tax rate. 'We have seen several fund houses launching income plus arbitrage fund of funds. With the tax issue now resolved, mutual funds could launch more innovative products in this space," said Rushabh Desai, founder of Rupee with Rushabh Investment Services. Earlier, all FoFs — barring those investing over 90% in domestic equities — were considered as non-equity funds for tax purposes. This meant all gains from FoFs were to be taxed at investor's slab rate. More innovations Fund houses are even filing for FoFs in other segments. For example, they have filed for a multi-asset fund of funds, wherein the FoF will invest in a mix of other funds; this could be debt funds, gold ETFs, silver ETFs, equity funds, etc. One of the fund houses has also filed for a multi-factor FoF, which will invest in other factor-based exchange traded funds (ETFs), tracking various factors such as momentum, value, quality, low volatility and growth. Another has filed for a fund of funds that will invest only in ETFs across asset classes — right from equities, gold, debt and even G-Sec read | The ONDC mutual fund pipeline has arrived. Will it take over the industry?Should you invest?New offerings within FoFs can take different forms, given the wide possibilities as these act as feeder funds. Some products can help you create a diversified portfolio, as FoFs can invest in different funds and ETFs. However, new innovations need not always be necessary for your portfolio if it is already well-diversified. So choose FoFs that can truly diversify your portfolio.
Time of India
10-07-2025
- Business
- Time of India
Gold demand: Gold ETF inflows hit 5-month high at Rs 2,081 crore in June; investor rush lifts AUM close to Rs 65,000 crore
Investor appetite for gold-backed mutual funds surged in June, with Gold Exchange Traded Funds (ETFs) attracting net inflows of Rs 2,081 crore, the highest in five months, amid resilient gold prices , market volatility, and geopolitical tensions. According to data from the Association of Mutual Funds in India (Amfi), the June inflows mark a sharp jump from Rs 292 crore in May and reverse the outflow trend seen in March and April. Overall, the category has clocked over Rs 8,000 crore in net inflows in the first half of 2025, PTI reported. The strong inflows pushed the segment's assets under management (AUM) up by nearly 4% to Rs 64,777 crore in June from Rs 62,453 crore in May. 'The robust inflows in June indicate a decisive shift in sentiment, likely supported by resilient gold prices, geopolitical uncertainties, and volatility in equity and fixed income markets, which have revived gold's appeal as a safe-haven asset,' said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India. Investor interest also reflected in rising folio counts, which rose by 2.85 lakh to 76.54 lakh in June from 73.69 lakh in May, indicating growing retail participation in the gold ETF space. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 3BHK Transformation Possible for ₹4.5 Lakh? HomeLane Get Quote Undo Two new gold ETF schemes were launched during the month, collectively mobilising Rs 41 crore. While modest in value, Meshram said the new launches 'add to the broader recovery in flows and reflect steady investor interest in the asset class.' Gold ETFs are passive investment vehicles that track domestic physical gold prices and are backed by physical gold of high purity. Each unit typically represents 1 gram of gold, offering a hybrid of gold investment safety and stock-like liquidity. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
09-07-2025
- Business
- Time of India
SIPs hit new high in June as D-Street uncertainty eases
MUMBAI: After a few months of flat growth in inflows by retail investors through SIPs in mutual fund schemes, the northward movement is back. In June, gross inflows through SIPs in MFs - an investment segment within the MF industry that is dominated almost entirely by retail investors - touched a new all-time peak at Rs 27,269 crore. This showed a monthly jump of 2.2%, data released by industry body Amfi for June showed. The month's growth number and the new peak in terms of gross flows came after seven months of stagnation when every month the inflow figure hovered around the Rs 26K mark. The month's figure also showed that the total assets under management (AUM) of the fund industry also scaled a new peak, at Rs 74.8 lakh crore. According to Amfi chief Venkat Chalasani, these growth numbers - in monthly SIP inflows and the total industry AUM - continued to be powered by strong retail participation. "The number of contributing SIP accounts also touched an all-time high of 8.64 crore, underlining the growing trust in mutual funds as a disciplined investment vehicle," he said. Chalasani also pointed out that net inflows into equity funds during June was at Rs 23,587 crore, which was the 52nd consecutive month of positive flows. "While market volatility has made some investors cautious, we're also witnessing a healthy shift towards hybrid and arbitrage funds, a trend that shows maturing investor behaviour and a preference for balanced risk strategies in uncertain times." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Dieses Hörgerät kann 2025 alles verändern Gutes Hören Undo June data for the fund industry also showed that SIP AUM for the industry was at Rs 15.3 lakh crore, translating to 20.6% of the total MF industry AUM, up from 20.2% in May. "The continued strength of SIPs underscores disciplined participation from retail investors. The inflows recorded in June may signify a turning point, reflecting enduring structural confidence in Indian equities and a growing risk appetite," Samco MF CEO Viraj Gandhi said. He also said that in June, inflows in small- and mid-cap funds continued to outpace those in large-cap segment. Outside of equity, "gold ETFs saw inflows of nearly Rs 2,000 crore, suggesting investor interest to seek both diversification and also gain from the performance of the metal," said Anand Vardarajan, chief business officer, Tata MF. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
New Indian Express
09-07-2025
- Business
- New Indian Express
SIPs cross Rs 27,000-crore mark; total AUM soars to Rs 74.4 trillion: Amfi
However, inflows through new fund offers fetched only Rs 1,986 crore, 52% down from the previous months when it was Rs 4,170 crore. Inflows through the systematic investment plan (SIP) route rose to a new high of Rs 27,269 crore in June, highlighting retail investors growing discipline and resilience despite market volatility. This marked a 2.2% increase over Rs 26,688 crore seen in May, and a 5.2% rise over March. The number of contributing SIP accounts also rose from 8.56 crore to 8.64 crore in June, taking SIP assets under management to Rs 15.31 trillion, or 20.6% of the fund industry's total assets, up from 20.2% in May. Total mutual fund folios reached 24.13 crore in June, of which retail folios across equity, hybrid, and solution-oriented schemes rose to 19.07 crore from 18.84 crore in May. Retail AUM across these schemes stood at Rs 43.99 trillion up from Rs 42.2 trillion in May. Commenting on the numbers, Venkat Chalasani, the chief executive of Amfi said, "while market volatility has made some investors cautious, we're also seeing a healthy shift towards hybrid and arbitrage funds, a trend that shows maturing investor behaviour and a preference for balanced risk strategies in uncertain times. 'In the equity funds category, large cap funds led gains with inflows of Rs 1,694 crore, up 35% from Rs 1,250.5 crore in the previous month, while small cap funds led gains in open-ended schemes with inflows of Rs 4,024.5 crore, up 25% from Rs 3,214 crore in May. Mid cap funds also saw inflows of Rs 3,754 crore, marking a 34% increase from Rs 2,808.7 crore. On the other hand, sectoral/thematic funds saw inflows falling by a whopping 77% to Rs 475.61 crore from Rs 2,052.5 crore, while ELSS funds saw outflows of Rs 556 crore, down 18% from Rs 678 crore outflows. Dividend yield funds posted inflows of Rs 45.55 crore, reversing from an outflow of Rs 20.82 crore in ETFs saw inflows jump to Rs 2,080.9 crore, rising over six-fold from Rs 292 crore in May, a 613% surge. Other ETFs saw inflows of Rs 844.43 crore, buy down 79% from Rs 4,086.8 crore. Inflows into hybrid funds rose to Rs 23,223 from Rs 20,765 crore in May and arbitrage funds saw the second highest inflows across categories at Rs 15,584 crore around 0.7% lower than 15,702 crore. Open-ended income/debt-oriented mutual funds saw net outflows of Rs 1,711 crore, a 89% increase from Rs 15,908 crore, while liquid funds continued to see heavy outflows at Rs 25,196 crore, though down 37% from Rs 40,205 crore. Overnight funds also remained in the negative zone with Rs 8,154 crore outflows. Shorter-duration categories saw strong inflows. Ultra short duration funds rose 59% to Rs 2,944 crore, while low duration funds were steady at Rs 3,136 crore. Short duration funds jumped 474% to Rs 10,277 crore from Rs 1,790 crore. Money market funds collected Rs 9,484 crore, down 15%; corporate bond funds saw inflows of Rs 7,124 crore, 41% lower from Rs 11,983 crore. Naval Kagalwala of Shriram Wealth noted as much as two-thirds (65.7%) of the monthly growth came from equity and hybrid schemes representing a growing interest for investing in equities. This should help build long-term wealth for investors. "However, 25% of the monthly growth is in mid, small and sectoral/thematic schemes, which are relatively higher risk, which calls for investors to diversify and allocate across categories and asset classes, in line with their risk profile," he added. Morningstar India's Nehal Meshram said that with net inflows crossing Rs 8,000 crore in the first half of 2025, gold ETFs are increasingly being used as part of long-term asset allocation strategies. The trend highlights gold's continued relevance in diversified portfolios, particularly amid uncertain economic and policy backdrops. Narender Singh of Growth Investing, says that the funds industry rolled out impressive data sets for June, with net inflow of 49,095 crore, 66% jump over May.
