10 hrs ago
Mutual Funds Join More IPOs but Invest Less
Mutual funds are still buying shares in many new companies that enter the stock market.
In 2026, they joined more IPOs than they did in 2025.
However, they invested less money in each IPO.
This suggests that fund managers are being more careful about how much they buy.
IPOs were also generally smaller this year.
Some IPOs gave strong gains after listing, but short-term returns after 30 days were weaker than last year.
Samir Arora has suggested that mutual funds avoid IPOs for 30 days because too many new shares may pressure the market.
The data instead show that funds are participating, but with smaller commitments.
Larger upcoming IPOs could change the final numbers for 2026.
Mutual funds participated in about 79% of IPOs covered in 2026, up from 73.3% in 2025.
Their investment fell to 26.6% of aggregate IPO size in 2026, versus 32.7% in 2025 and 34.8% in 2024.
Average mutual-fund investment per participating IPO dropped to about ₹412 crore from ₹749 crore in 2025.
The 64 IPOs launched through September 3, 2026, raised ₹74,264 crore, with an average issue size of about ₹1,160 crore.
Average listing-day gains improved to 12.9%, while 90-day post-lock-in returns reached 24.8%, compared with 7.1% in 2025.
- Who
- Indian mutual funds, with comments from veteran fund manager Samir Arora.
- What
- Mutual funds are participating in more IPOs in 2026 but investing smaller amounts in them.
- Where
- The data concern domestic Indian equity markets and Indian IPOs.
- When
- The analysis was published September 5, 2026, and covers IPOs launched through September 3, 2026.
- Why
- The study indicates that fund houses may be exercising greater discipline in position sizing after heavy investment in 2024 and 2025.
Pause or Reduce IPO Exposure
Participate Selectively in IPOs
Response to Heavy IPO Supply
Pause or Reduce IPO Exposure
Samir Arora suggested that mutual funds stay away from IPOs for 30 days because continuing new-share supply may be weighing on the market.
Participate Selectively in IPOs
The study found that mutual funds participated in about 79% of IPOs in 2026, indicating that they have not broadly withdrawn from the market.
Investment Strategy
Pause or Reduce IPO Exposure
Lower aggregate and average investments could be viewed as evidence that funds are becoming cautious about IPO deployment.
Participate Selectively in IPOs
Funds are still entering IPOs more frequently, but appear to be controlling risk by committing smaller amounts.
IPO Performance
Pause or Reduce IPO Exposure
Average returns after the 30-day lock-in period were 7.9% in 2026, below 8.8% in 2025.
Participate Selectively in IPOs
Average 90-day post-lock-in returns were 24.8% in 2026, well above 7.1% in 2025, while listing-day gains also improved.
Key facts
- 2026 MF participation
- About 79% of IPOs with available data
- MF investment share
- 26.6% of aggregate IPO size in 2026
- Average MF investment
- About ₹412 crore per participating IPO in 2026
- 2026 IPO fundraising
- ₹74,264 crore across 64 IPOs launched through September 3
- Average IPO size
- About ₹1,160 crore in 2026
- Listing-day gains
- 12.9% on average in 2026
- 90-day returns
- 24.8% on average after the 90-day lock-in period










