Category II AIFs are typically private equity and debt funds that invest in equity and equity-linked securities, including investments in companies headed for initial public offerings (IPOs). “Overwhelming demand by investors coupled with increasing investment avenues given the healthy IPO pipeline has resulted in rising confidence in such a unique product offering,” said Amit Shah, chief executive officer, IIFL Asset Management.
The IPO-focused fund comes at a time when the primary market is witnessing significant activity.
Indian companies have raised a total of $10 billion in the first half of 2017 by selling equity and equity-linked securities, a 127.8% increase from a year ago, according to a report by Thomson Reuters.
Some of the recent IPOs include AU Small Finance Bank, Central Depository Services Ltd and Avenue Supermarts Ltd. AU, which was listed on 10 in July at an issue price of Rs358, has gained 65.8% since its listing, closing at a price of Rs. 593.70 on the BSE on Monday. The initial public offering , a pure offer for sale, saw promoter Sanjay Agarwal and investors Warburg Pincus LLC, International Finance Corp., ChrysCapital and Kedaara Capital together selling 53.42 million shares, or close to an 18% stake in the company.
CDSL has gained 156% from its issue price of Rs149, while Avenue Supermarts Ltd has gained 204.65% from its issue price of Rs299.