MFs invest in SME IPOs; Reliance MF in Valiant Organics

New Delhi, Oct 5 ()

Mutual Funds

have begun investing in quality small and medium enterprise (

SME

) IPO, with a public issue of over Rs 21 crore by

Valiant Organics

getting investment from leading fund house

Reliance MF

. Valiant Organics came out with an initial public offering (IPO) of 9,64,800 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 220 per equity share. The issue opened on September 29 and closed yesterday. The company will be listed on the SME platform of the BSE (formerly known as Bombay Stock Exchange). "We always look for investment in quality companies and Valiant Organics is one of them. We have applied for shares worth Rs 8 crore in Valiant Organics' IPO," Sunil Singhania, CIO for equity investment at

Reliance Mutual Fund

said. Valiant Organics is a chemical company with focus on manufacturing and marketing of different types of chlorophenol which has several applications in agro-chemical, pharmaceutical, dyes industries as well as manufacturing of cosmetics and veterinary drugs. According to

Mahavir Lunawat

, MD of

Pantomath Capital Advisors

, a leading merchant banker in the SME IPO space, said SME stocks emerge as a good diversification tool. There are various SME stocks in which brokerages have started showing interest. "In fact, banks, and mutual funds have started looking positively at SME stocks though participation is still below the desired level. Banks and mutual funds participated in the scrips of

Ashapura Intimates Fashion

and

Moami Apparels

at primary and secondary level," he added. Besides, Edelweiss has participated in the recently concluded IPOs of Comsyn, Sakar Healthcare and Nandini Creation. SP ANU