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Mutual Funds are common investment instruments of many tiny share holders. If they get some protection, benefit and privileges to earn profit and distribute that to those tiny share holders, it should be ok. We were in the market when Mutual Funds were not there and other investment companies were also not that much attracted towards IPOs.

Now, there are Mutual Funds, institutional investors and big investors attracted towards IPOs. Hence, IPOs are not the paradise for small investors. The market will move on its own course. We have have to adjust our investment behaviors accordingly. If we will not do that and expect administrative mechanism will ease our burden, we may vanish in this world of social Darwinism, that is "survival of the fittest.". We should swallow this bitter fact.

Hence, days are gone when IPOs were considered safe. Most probably, like in other advanced market, IPOs will be allowed to add premium for their scripts. When that happens, it would be even difficult to profit from it. In that scenario, small investors have to move to Mutual Funds or other institutions or collectives/ cooperatives for getting attached to common investment instruments.

Let's make ourselves ready before it becomes too late. In any case, we small investors should not, from now on, depend on IPOs. It could still be an option but not dependable one.

Buffet ji

I completely agree with you.

But when we are looking on today's scenario we have only 2 or 3 major Mutual funds so they are allocated around 2 to 2.5% of the public shares.

which I still think Mutual Funds should hold atleast one year for the IPO investment they make.

Buffet ji is right if there are more number of Mutual funds then only will help the market.

5% is reserved for mutual fund companies, if more mutual fund companies comes then their share will be less. It means that they will get less share which will be helpful for market.

New mutal fund are in queue , if 2 can destroy the market than what'll be the market when it's no will be double or triple???

Yes I also agree with u Razvi Ji.

Thanks Buffet Ji....

You are right... At this moment they are seen as market destroyer and not as market maker.

If given the same opportunity to the individual IPO investor as given to the Mutual Funds, I am sure people wouldn't mind holding for three years if they get the number of shares they demand at Rs 100.( Like the employees have been holding IPO shares for three years)

Really a good suggestion Razvi.........alteast they must have lon in period for more than 2 year. IF staff has login period then why not mutual fund companies. Actually they are not market maker they are market destroyer.

Civil Bank stocks and Commerz & Trust Banks stocks are trading at around Rs 145 per share for few months.

One of the reason is Some Mutal funds have these stocks at Rs 100. The Mutal Funds have the privilege of getting 5 % of the IPO shares.

These so called Mutual Funds are selling to book the profit right away. They get 45%-50% profit right away. These Mutal funds cost per share to these IPO is Rs 100 because what ever they apply, they get those quantity of shares.

so I think till these Mutal funds keeps on selling these shares the price may not increase for these banks shares and same is going to happen with all the new IPOs shares that will be traded in the market in the coming days.

so My suggestion to the concerned authority is please make the Mutual Funds to hold the IPO purchased shares atleast for one year. ( My personal view though) other wise slowly the charm of the IPO may deteriorate in the days to come.