NFO

Change comes amid criticism around surge in new offerings by asset managers

Markets regulator Sebi on Thursday made it mandatory for asset management companies to deploy money collected from investors through new fund offers (NFOs) within 30 days from the date of allotment of units. At present, there is no time limit for deployment of funds. The measure, to be implemented from April 1, 2025, is aimed at encouraging AMCs to collect only as much funds in NFOs as can be deployed in a reasonable period of time and to discourage any mis-selling of NFOs of the mutual fund schemes In a circular, Sebi asked AMCs to specify achievable timelines in the Scheme Information Document (SID) of a mutual fund scheme regarding the deployment of the funds as per the specified asset allocation of the scheme and garner funds during the NFO accordingly. "The AMC shall deploy the funds garnered in an NFO within 30 business days from the date of allotment of units," it added. In an exceptional case, if the AMC is not able to deploy the funds in 30 business days, it must give rea

Sebi chief calls upon Amfi for guidance on the issue

The other new launches include Mirae Asset Smallcap Fund, Bandhan Nifty Alpha Low Volatility 30 Index Fund, Kotak Nifty Smallcap 250 Index Fund and UTI Quant Fund.

The scheme will invest in quality stocks that show sustainable high earnings growth, high capital efficiency, good corporate governance and have low or negligible leverage

Sebi's new rule is a positive step towards investor protection. It will reduce mis-selling by aligning distributor incentives with investor interests and discourage unnecessary portfolio churn

Last month, fund houses introduced 21 new equity schemes, with another five launches already lined up for November

ICICI Prudential Mutual Fund is set to float its new scheme focusing on the energy sector on Tuesday, a move that will provide investment opportunities in this space. The energy theme involves a wide range of industries, including oil & gas, bio energy value chain, and lubricants, among others. The new fund offer (NFO) of ICICI Prudential Energy Opportunities Fund will open on July 2 and conclude on July 16, the MF house said. "With the ongoing transition towards renewable energy and the government's focus on achieving net-zero emissions, the energy theme offers significant growth potential. Through this scheme, investors can gain access to a diversified portfolio of companies across the energy value chain," ICICI Prudential MF CIO Sankaran Naren said. The open-ended scheme aims to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of companies engaged in traditional and new energy industries as well as allied businesses.

Samco Asset Management expects to mop up Rs 500 crore from its new fund offer that tracks long-term capital growth through undervalued or overlooked opportunities, a top company official said on Thursday. The new fund offering (NFO) would open on May 17 and conclude on May 31. In an interaction with PTI, Umeshkumar Mehta, Chief Investment Officer of Samco Mutual Fund, said the objective of the fund is to achieve long-term capital appreciation by investing in a portfolio of securities "that are involved in 10 special situations". These "situations" include digitisation, spin-offs & corporate actions, reform-based strategy, undervalued holding companies strategy, trends sustainable over time, innovation & technological disruption, and new & emerging sectors. These 10 sub-strategies define the "disruption" model and are weaved around different corporate actions. These situations often create mispricing and undervalued opportunities that the fund aims to exploit for potential .

Smallcap schemes see moderation in flows as Sebi takes stock of risks

According to the fund house, the scheme received flows from across the country through nearly half a million applications

Axis Mutual Fund on Tuesday announced the launch of a new fund from which it targets to collect at least Rs 100 crore during the primary subscription period. The Axis Sensex index fund is an open-ended scheme tracking the S&P BSE Sensex, and opens on February 8 and closes on 22nd. Considering the wide spectrum of sectors and the largest companies the index covers, it offers investors a diversified portfolio and an opportunity to participate in the growth story of various sectors with a single index, said B Gopkumar, MD & CEO. On the rationale behind the fund, he said passive investing is becoming more and more acceptance today and the new fund recognises the need to provide an investment option that aligns with the evolving preferences of today's investors. Ashish Gupta, Chief Investment Officer told PTI that the fund house is targetting to raise at least Rs 100 crore during the subscription period.

Asset management companies launched 212 new fund offerings mobilising Rs 63,854 crore in 2023, marginally higher from previous year, on the back of significant uptrends in broader markets. In comparison, Asset Management Companies (AMCs) garnered Rs 62,187 crore through 228 New Fund Offerings (NFOs) in 2022. Further, they collected Rs 99,704 crore in 2021 and Rs 53,703 crore in 2020, according to data compiled by Morningstar India. "The trend towards the financialisation of assets in India is unmistakable. Aligned with changing consumption behaviours and a need for a higher standard of living, investors recognise the importance of long-term investing. The COVID-19 pandemic underscored the necessity for financial planning and the creation of liquid assets to address emergencies and pave the way for wealth-building," FYERS Research said in its report. It further said that "despite indices exhibiting strength, propelled by robust economic activity, steady GST collections, and confidenc

NFO receives around 123,000 applications from over 70% of pincodes in India, the fund house says

The scheme will target aggregate dividend yield that is at least 50 per cent higher than the Nifty 50 index

At Rs 260 crore, average amount mobilised per new fund offer 57% below last financial year's tally

Nearly 40% NFOs filed since July are for these passive debt funds

They are more transparent and control both interest-rate and credit risk

The key investment theme would be identifying companies that have innovative thinking

Experts say broader market recovery can lead to higher mobilisation of assets