New Delhi, Nov. 17 -- The recent uproar over mutual funds investing in Lenskart's IPO despite lofty valuations grabbed attention, but it is hardly an isolated case. Most mutual fund houses had participated in the IPO, and their investors took to social media questioning the rationale to invest in a firm with a steep valuation of 260x.

Squeezed by a sluggish, over-valued secondary market and a growing fear of missing out, India's mutual funds are pushing more money into initial public offerings (IPOs) in search of better returns as they continue to receive robust flows.

Mutual funds typically participate in IPOs as anchor investors or qualified institutional buyers (QIBs), routes also used by foreign institutional investors (FIIs), banks...