Edelweiss Recently Listed IPO Fund Analysis


Edelweiss mutual fund has decided to convert Edelweiss Maiden Opportunities Fund – Series 1 to Edelweiss Recently Listed IPO Fund.


What is Edelweiss Recently Listed IPO Fund?

Edelweiss Maiden Opportunities Fund – Series 1 was launched as a close ended fund in February 2018 with the primary objective of availing opportunities in recently listed and upcoming NFO’s.

The fund has now been converted to an open-ended fund.

Edelweiss Recently Listed IPO Fund is an open-ended equity fund following an investment theme of investing in recently listed 100 companies or upcoming IPO’s.


edelweiss mutual fund

Scheme Details for Edelweiss Recently Listed IPO Fund

Minimum Investment

Rs 5,000

Conversion Date

29th June 2021


India Recent 100 IPO Index

Exit Load

Upto 180 days – 2%

After 180 days - Nil


Additional reading: Click Here to read our complete report on Dividend Yield mutual funds

Edelweiss Recently Listed IPO Fund Strategy

The fund as the name suggests will be investing in recent 100 IPOs to take advantage of listing and post listing gains.

The fund will also look for opportunities in companies about to be listed with a lookout for new age businesses.

It will be biased towards mid and small cap stocks.

The fund would usually have around 30-40 stocks in its portfolio.

The fund is not under any obligation to invest in each and every ipo.

It reserves the right to not participate in IPO’s that it may not consider fruitful and at the same time can also exit from a stock in the future after IPO participation.

Even though the close ended fund prior to conversion had a low churn rate, you should not read too much into it since it was a close ended fund meaning it had no option for new inflows which could have highly influenced the low churn rate.


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Asset Allocation for Edelweiss Recently Listed IPO Fund   

The asset allocation for the fund would be something like this

Asset Class



Equity and Equity Related instruments including derivatives of recently listed 100 companies or upcoming IPOs



Equity and Equity related instruments including derivatives of other than recently listed 100 companies or upcoming IPOs



Debt and money market instruments





Possible gains for Edelweiss Recently Listed IPO Fund 

The fund gives you the opportunity to avail of post listing gains.

Even though other equity funds can also provide the same, other funds are under no obligation to invest in IPOs so chances are slim.

The fund can decide which IPOs to invest and which ones to avoid, meaning you do not need to research the same.

The minimum investment is on the lower side since you will be investing via a mutual fund and not directly.

The fund does have a unique proposition unlike other equity funds which provides meaningful diversification.


Additional reading: Click Here to read about the various types of equity mutual funds

Possible risks for Edelweiss Recently Listed IPO Fund

The fund requires a minimum 80% investment in recently listed 100 companies or upcoming IPOs.

This makes the fund highly restrictive with regards to diversification.

Quality IPOs usually come with periodic breaks thereby the fund may not always have the option of quality purchases.

This restrictive model along with the fund’s model of bias towards mid and small cap stocks makes the fund highly volatile.

The other side of this volatility can generate decent returns but it is not unique to this fund, other plain equity funds can provide the same with better stability.

edelweiss mutual fund

A higher portion of the fund’s portfolio is allocated to the banking and financial sectors.

This is in line with the number of IPOs belonging to these sectors in the past few sectors.

As on 31st May 2021, the fund had around 40 stocks in its portfolio.

This again is line with the fund’s philosophy of holdings around 30-40 stocks.

This makes the portfolio a focused portfolio with restrictions in its style and a bias towards mid and small cap stocks.

The fund was overweight on the following sectors:

  1. Financial
  2. Services
  3. Healthcare &
  4. Engineering

While it was underweight on the following sectors:

  1. Technology
  2. Construction
  3. FMCG &
  4. Automobile


Its allocation to the various caps is as under:

  1. Large cap – 36.67% 
  2. Mid cap – 48.09%
  3. Small cap - 15.25 %

The fund more often than not will have a higher exposure towards mid and small cap stocks compared to large caps.


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Should you invest in Edelweiss Recently Listed IPO Fund?

The fund although admittedly provides a unique investment option, the risk reward ratio for the same is poor.

The portfolio is highly restrictive, focused and with a bias towards mid and small cap stocks.

The returns do not justify the volatility when other plain equity funds with a much more simplistic approach are available.

Playing the long term game does sound good on paper but that logic cannot be applied in this case since this fund is highly restrictive, invests a minimum of 80% in either recent 100 or upcoming IPOs and then again the fund is selective with the IPO’s it will participate in.

The fund for a long time can remain stuck with selective underperforming stocks too if it cannot find decent opportunities.


Here is why IPOs are not always a good idea:

This is not the 90s anymore when research was scarce, mutual funds were still at a nascent stage and the stock market was seen as a gambler’s den.

Things are far more formalized and regulated although there is always room for improvement.

With IPOs not enough information is available on the company about to be listed to undertake research or form any sort of opinion, although past returns and performances are no surety for the future but they do help understand how a company does overall specially when things are not looking so good.

IPOs these days are outrageously valued even though there are not enough credible numbers to back them.

Be it mutual funds or direct equity, a strong sense of conviction is needed since you invest for the long term ideally but the same is not visible with IPOs since neither credible numbers are present nor enough resources on the management is available.

         Investments should be simple and anything beyond that should provide you with strong enough reasons in terms of quality as well as quantity and past results and future prospects to gain your attention.

         Edelweiss Recently Listed IPo Fund fails on many counts to be considered let alone be a serious contender for your mutual fund portfolio.  


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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
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