Mutual Fund collection via new fund offering surges to ₹22,000 crore in July-Sep quarter: Report

Mutual funds collection via new fund offerings (NFOs) have surged to ₹22,000 crore in July-Sep quarter after 48 new schemes launched in the market, which is nearly four times to the preceding quarter, according to a report by news agency PTI.

In the upcoming quarters, an increase in the issuance of NFOs (New Fund Offers) as multiple Asset Management Companies (AMCs) commence operations, presenting both comparable and distinct financial products to both equity and debt investors in being anticipated, Gopal Kavalireddi, Vice President of Research at FYERS, was quoted as saying by PTI.

"With investors firmly believing in the India growth story and the emergence of new segments in organised space, more and more companies are seeking funds through primary and secondary market offerings. To support these listed businesses, AMCs would be interested in launching more schemes across equity and hybrid categories, especially in the mid-, small-, and micro-cap market capitalisations,” he said.

According to a report by MorningStar India, the quarter ended in September 2023 saw the launch of 48 new schemes, which were able to garner over ₹22,049 crore at the NFO period, as compared to 25 schemes launched earlier in June quarter garnering over ₹5,539 crore during their NFO period.

Typically, NFOs are launched amidst a thriving market characterized by elevated investor confidence and optimism. These NFOs are introduced to leverage the positive sentiment among investors, enticing them to invest during this opportune period when they are more inclined to commit their funds.

Feroze Azeez, Deputy CEO of Anand Rathi Wealth was quoted as saying that this huge inflow in NFOs is primarily due to the overall sentiment towards equity.

He further said that the monthly flow for Systematic Investment Plans (SIPs) has risen to ₹16,900. The cumulative inflow into mutual funds since the beginning of the year has reached ₹80,000 crore, indicating a growing trend towards equity. This momentum is also contributing to New Fund Offers (NFOs) experiencing substantial inflows.

Furthermore, NFOs are expected to continue in the thematic, sectoral, and passive categories, Azeez added.

ICICI Pru Innovation Fund, Baroda BNP Paribas Value, Bajaj Finserv Flexi Cap, HDFC Defence Fund, and HSBC Consumption Fund were the top-performing schemes in terms of accumulating the highest Asset Under Management (AUM) during that quarter.