The MF industry has raised ₹19,164 crore through the launch of 117 NFOs in the first six months of this year
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Mutual funds are riding on the bullish sentiments in the primary markets, not just by investing in them, but also attracting some investments by launching a spate of new fund offers.
Currently, there are 18 new fund offers of MFs waiting to be grabbed by investors, and this trend is likely to gain momentum, with new entrants in the asset management space launching NFOs in the next few months.
Passive surge
In fact, in the last 10 days, five mutual fund houses have filed papers with SEBI to launch six NFOs. Interestingly, all of them are on the passive side and returns from these funds are linked to the movement of a particular index with no discretion of fund managers.
Amid a volatile equity market and tepid returns from IPOs, investors have been lapping up NFOs.
Retail Revolution
Among the latest entrants, JioBlackRock AMC — a joint venture between Reliance Industries and global fund manager BlackRock — recently mopped up ₹17,800 crore through the launch of overnight, liquid and money market funds.
The NFO witnessed participation from over 67,000 individual investors and more than 90 institutional investors.
Buoyed by the tremendous response from investors, the digital-focused JioBlackRock AMC has filed draft documents to launch eight schemes, focusing on low-cost, direct-to-investor offerings. The JV aims to disrupt the ₹72 lakh crore fund management business in India with a minimum investment limit of ₹500.
Additionally, new entrants in the MF space, such as Bajaj Finserv, Groww, Samco, Zerodha and CapitalMind have lined up NFOs to compete in the 47-member asset management business.
NFO boom
The MF industry has raised ₹19,164 crore through the launch of 117 NFOs in the first six months of this year. Of this, 25 equity NFOs have mopped up ₹10,690 crore, according to data from the Association of Mutual Funds in India.
Venkat Chalasani, CEO, AMFI, said, “The launch of NFOs is expected to continue with the new entrants trying to make a space for themselves and the focus may be on the passive front to cater for the mass market.”
“Retail investors have reposed their faith in the MF industry by pouring into equity schemes consecutively for the last 52 months despite market volatility and geopolitical tensions,” he added.
The MF industry has managed to attract investors’ interest despite the sharp increase in fundraising through initial public offerings.
Swapnil Aggarwal, Director of VSRK Capital, said, “NFOs offer immediate diversification across multiple stocks and reduce single company risk. On the other hand, IPOs give direct ownership in a specific company, and investors’ returns depend on the financial performance of a single company,” he said.
While all investors in NFOs get units at ₹10 a piece, there is no guarantee of allotment in IPOs, and bids can be placed only in specific lots, besides the IPO shares are allotted on a pro rata basis, he said.
IPOs are best suited for investors with a higher risk appetite, while NFO offers a unique and compelling investment strategy that aligns with long-term gains, he said.
Published on July 11, 2025