Axis Bank Ltd.'s asset management unit plans to set up a fund for investments in IPO-bound companies, Mint reported, citing "two people aware of the development."
Axis Asset Management Co. Ltd. plans to raise between 7.5 billion rupees and 10 billion rupees for the fund. The asset manager aims to tap rising demand for pre-IPO investments among high-net-worth individuals and family offices, one of the sources said, noting that such investors face difficulty in gaining a meaningful allocation in IPOs due to strong demand.
Such capital raising prior to an IPO often takes place at a discount to the IPO price, further enhancing investor returns, the source added.
Axis Asset Management has partnered with wealth management company ASK Group for distribution of the pre-IPO fund to the latter's clients and both companies will each raise half of the fund, the second source said. The fund will mainly focus on pre-IPO investments, but will also look at investing in IPOs, the source added.
Axis Asset Management and ASK Group did not respond to Mint's emails seeking comments, the publication said.
As of Nov. 21, US$1 was equivalent to 64.91 Indian rupees.