Naval Bir Kumar (left), managing director of Standard Chartered Mutual Fund, with Rajiv Anand, head of investments, in Mumbai on Wednesday. (Fotocorp)

Mumbai, April 19: You are a harried retail investor: you don?t have much cash, and you are dying to get your hands on some juicy stocks that are being offered through IPOs. But you also realise that the chances of getting the shares is next to zilch considering the huge oversubscriptions.

Well, quit worrying.

Standard Chartered Mutual Fund now has a three?year close-ended Enterprise Equity Fund that?s designed just for you: it?s the only fund that plans to invest solely in IPOs and follow-on offers.

You buy the units ? and you reap the gains. The fund will buy and sell the IPO stock as soon as it realises the gains ? called flipping ? and you can laugh all the way to the bank. With an avalanche of IPOs lined up, it?s a terrific option for the small investor. And maybe the big investor too.

?This is a first-of-its-kind product, which will allow the retail investor to invest in several IPOs and follow-on offers without the associated problems of filling out several forms, setting up demat accounts and waiting for refund on shares not allotted,? said Naval Bir Kumar, managing director of Standard Chartered Mutual Fund.

?As 5 per cent of the institutional portion is reserved for mutual funds, the fund has a much greater chance of allotment even in case of huge oversubscription,? he said.

?Further, if a retail investor was to sell the shares on allotment, the listing gains accrued would attract short term capital gains tax, which a mutual fund does not have to pay,? Kumar added.

The fund may even sell the allotment on listing.

?The idea is to play on market opportunity and roll the assets under management across several initial offers to accrue listing gains as a mutual fund has to make an application with only 10 per cent margin money,? said Kenneth Andrade, fund manager of the Enterprise Equity Fund.

?More than 200 companies will hit the primary market in the next two to three years,? said Kumar. ?Though the fund will seek to capitalise on the initial offers and not undertake extensive fundamental research, it will, however, follow certain parameters such as not investing in penny stock IPOs. It will also not invest in issues which does not have QIB reservation and in greenfield projects,? said Andrade.