Policybazaar & Paytm Are Top IPO Picks For Mutual Funds In November

As the much awaited startup IPO season began in November, mutual funds invested the most in the public offerings of insurtech unicorn Policybazaar and fintech giant Paytm.

A report by Edelweiss Alternative Research showed that mutual funds invested INR 4,050 Cr in initial public offerings (IPO) last month, out of which INR 1,350 Cr was invested in the Policybazaar IPO and INR 980 Cr was put into the mega offer of Paytm.

Major funds house Aditya Birla Sun Life Mutual Fund invested INR 469 Cr in One97 Communications (parent company of Paytm), and INR 152 Cr in PB Fintech (parent company of Policybazaar), Axis Mutual Fund invested INR 243 Cr into Policybazaar.

HDFC Mutual Fund infused INR 127 Cr in the INR 18,300 Cr Paytm IPO and INR 56 Cr into the Policybazaar’s offer.

Post a largely tepid response to India’s largest IPO of INR 18,300 Cr, Paytm made a weak debut on the stock exchanges on November 18 as it listed at a discount of around 9%. 

Around 2.45 p.m, shares of Paytm on the BSE were trading at INR 1,351.50, lower by INR 47.80 or 3.42% from its previous close.

On Wednesday, the lock in period for anchor investors, which also included mutual fund houses, ended leading to a slump in the shares during the session. They, however, recovered from the lows on Wednesday.

On December 13th, 2021, the NCR-based digital payments giant said that its gross merchandise value (GMV) for the October-November period of FY22 stood at INR 1.66 Lakh Cr, registering a growth of 129% on a year-on-year basis.

Its revenue from operations during the July-September quarter rose 63.6% at INR 1,086.4 Cr.

PB Fintech, which runs Paisabazaar and Policybazaar, witnessed healthy response in its IPO and was listed at a premium of 17% on November 15th, 2021.

The Policybazaar offer, from November 1 to November 3, attracted bids worth a total of nearly $7.53 Bn (INR 56,093.64 Cr) at the upper limit of the IPO price band of INR 940 – INR 980.

PB Fintech’s shares on the BSE were trading at INR 1,087.15, lower by INR 15.40 or 1.40% from its previous close.

MFs Dilute Stake In Zomato

Fund houses, however, lowered their stake in Zomato, showed the report. At the end of November, mutual funds had 306.6 Mn in Zomato, down from 347.9 Mn a month ago.

Around 2.40 p.m. the foodtech unicorn’s shares on the BSE were trading at INR 136.90, lower by INR 1.55 or 1.12%.

In the past one month, its shares have declined nearly 25%.

The online food aggregator unicorn has nearly doubled its consolidated net loss for the quarter ended September to INR 434.9 Cr. During the same period last financial year (FY21), the foodtech giant had reported a net loss of INR 229.8 Cr.

The increase in losses come on the back of a 174% rise in its expenses to INR 1,601.5 Cr during the period under review, from INR 584.9 Cr in the same period last fiscal.

Food delivery aggregator Zomato announced a slew of agreements as it released its Q2 FY22 earnings. The foodtech has sold its fitness facility arm Fitso to fitness startup Curefit for $50 Mn.

In the cross-selling, Zomato also infused an additional $50 Mn in cash in Curefit. This way, it has acquired a total shareholding of 6.4% worth $100 Mn in the fitness startup.