Do you remember the days of the IPO frenzy, post-pandemic, when Zomato, Paytm, and Nykaa were among the companies that landed on the bourses with an inflated opinion of themselves, thanks to the greed of initial retail investors and promoters?
However, that inflated view soon witnessed a correction and retail investors saw a loss in their holdings having invested in new-age tech companies like Nykaa, Paytm, PolicyBazaar, and Delhivery.
In November, however, the lock-in period for pre-IPO and anchor investors ends in the above-mentioned four companies. What will happen then? Money Assist, a mutual fund investment agent in India, looks into the scenario.
Several mutual fund houses were invested in these new-age tech stocks. For instance, mutual fund houses like:
took up some shares in these companies. The rationale behind the fund houses investing in these businesses, with non-traditional business models, has been questioned by experts. But the fund managers defended themselves by saying that these companies changed the way business was done. For instance, Policy Bazaar changed the way insurance policies were bought, Nykaa changed the way cosmetics were bought, so what was there not to like about such path-breaking companies?
Fund managers are saying that these companies have a large user base, meaning they cannot be ignored completely. Moreover, they defend their decision by saying that they have invested in companies that had a clear leadership position in their sectors. This seemed like a good decision then, they say, so how can we be questioned now?
But those fund managers who steered clear of mutual fund investment in these new-age tech companies talked about the interest rate hike which is going to make it difficult for these companies to raise money.
The future is looking a bit bumpy for mutual fund investors who invested in new-age tech stocks. While there isn’t a significant portion of money invested in these stocks as was evident from the data released, there are some fund houses that are snapping up stocks of Zomato at lower valuations. So, if your money has been indirectly invested in these companies, there’s not much you can do about it. The call is on the manager whether they wish to invest in it or not.
So, if you are looking for a way to invest in mutual fund investments you can approach Money Assist. We are a leading mutual fund agent in Kolkata that will help you to invest hard-earned money in mutual funds.
