As the stock index approached a record high, the secondary market was enthusiastic and excited to hit a new high. A boom in the secondary market kept primary market investors busy in November, with as many as nine new listings.

According to a Grant Thronton report, that was the highest reading for 2022 and the fourth-highest single-month reading in the past 11 years.

However, compared with 2021, the primary market is still far away. There have been 32 initial public offerings (IPOs) raising $7.6 billion in 2022, compared with 53 IPOs raising $15.4 billion in 2021.

When the secondary market has good momentum, IPOs will attract the interest of many retail investors for various reasons, and there will be a large influx. But this time around, mutual funds have joined the ranks, as they featured in all nine November IPOs, according to industry data.

The holding value of mutual funds in newly listed companies stood at around Rs 3,300 crore at the end of November, while they bought Indian equities worth Rs 34,900 crore last month as compared to Rs 1,700 crore deployed in the secondary market with foreign institutional investors (FIIs).

Mutual funds continue to see strong inflows through continued growth in systematic investment plans (SIPs), despite a notable decline in one-time investments in mutual funds. Pagaria added that this gives them room to deploy capital in the primary market.

Mutual fund holdings at the end of last month were Rs 980 crore in Global Health, Rs 930 crore in Archean Chemicals, Rs 530 crore in Bikaji Foods, Rs 350 crore in Fusion Micro Finance, Rs 220 crore in Kaynes Technology India, Rs 140 crore from Fivestar Business Finance, Rs 100 crore from Keystone Realtors and Rs 50 crore from Inox Green.

Mutual funds bought bank and index heavyweights in November, with HDFC Bank the most. They have deposited about Rs 2,700 crore in India’s largest private bank. It was followed by Axis Bank with buys worth Rs 1,370 crore, and newly listed Archean Chemicals was third with inflows of Rs 930 crore.

Stocks that fell out of favour last month included ICICI Bank, with mutual funds selling shares worth Rs 3,130 crore, HCL Technologies selling shares worth Rs 1,600 crore and Kotak Mahindra Bank selling shares worth Rs 1,420 crore.

Among mid-caps, Delhivery, Max Financial, Bikaji Foods and PB Fintech were the most overweight mutual funds. However, they reduced their positions in BHEL, Ramco Cement, Gujarat Gas and PVR.

Key small-cap additions were Archean Chemicals, Fusion Micro Finance and Kaynes Technologies. Significant layoffs in November occurred at Praj Industries, GE Shipping, UTI AMC and Fino Payments.

Mutual funds have been added to HDFC Bank, Hindustan Unilever, Bajaj Finance, Asian Paints and Nestle over the past three months. Meanwhile, they have reduced their stakes in ICICI Bank, LIC, Wipro, Grasim Industries and Varun Beverages.

Mid-cap stocks in favour from September 2022 include Balkrishna Industries, Astral, Alkem Labs, Star Health & Allied Insurance and Tata Communications. Mutual funds cut stakes in Aurobindo Pharma, Oracle Financial Services, Linde India, Aarti Industries and Thermax.