NEW DELHI: At a time when many companies have withdrawn or delayed their IPO plans due to Adani-Hindenburg controversy, the mutual fund industry remains unfazed by the volatility in the share market.
Undeterred by the impact of meltdown in Adani firm stocks following the report of US-based short seller, asset management companies are staying firm on their plans to launch new fund offers (NFOs).
SBI Mutual Fund, the largest fund house in the country, has launched SBI Dividend Yield Fund on Monday. The NFO will close on March 6. Union Mutual is planning to launch ‘an innovations and opportunities fund’ in the next quarter. HDFC Mutual Fund has launched MNC Fund, which is still open for subscription and will close on March 3. Bank of India Mutual Fund launched its Multi Cap Fund on February 10.
These NFOs come at a time when many firms have withdrawn or delayed their fund raising plans via initial public offerings (IPO) citing volatility in stock market due to a fall in the shares of Adani Group firms after the release of a report by Hindenburg Research. Promoters of the companies fear the controversy has dented retail investors’ confidence in the equity market.
But the MF industry thinks otherwise. “Our stock markets have seen so many challenges in the past which looked daunting at that time like Harshad Mehta, Asian crisis, Ketan Parekh, 9-11, and others. Despite these challenges, people have made money from the market,” G Pradeepkumar, CEO, Union Mutual Fund, told this newspaper. “If you stay away from the market, you will never be able to make money.
We believe that at current levels nifty is at a small premium to its underlying fair value, not a significant premium, so we believe it is a good time to invest,” he added. Another reason behind MFs’ confidence is insignificant exposure of Asset Management Companies to the Adani Group firms.