Record NFO surge: Mutual funds outpace IPOs, raise ₹51,399 crore in 10 months

It is raining money not only in the primary market but also in the mutual fund houses. The overall fund raised by mutual funds through new fund offers had pipped the initial public offer in the first ten months of this year.

Mutual funds have raised a whopping ₹51,399 crore in ten months and ended October through 142 NFOs, as against about ₹32,200 crore mopped up through initial public offering in the same period.

Interestingly, only 10 of the 40 IPOs completed this year have been worth over ₹1,000 crore.

However, riding on the bull run in the equity markets, mutual funds have ₹28,429 crore through equity new fund offers, the highest being ₹10,516 crore in the September quarter.

  • Read: Mutual funds’ NFO collection surges 4 times to ₹22,000 cr in Sep qtr

SBI Mutual Fund and Kotak Mahindra AMC have raised ₹3,600 crore each through their Dividend Yield and multi-asset allocation fund.

Among equity offerings, thematic stole the show with 22 NFOs mopping up ₹12,372 crore while five flexi-cap and six multi-cap funds raised ₹2,478 crore and ₹7,220 crore

  • REAL RETURNS. Why fund houses really launch NFOs

The small-cap stock frenzy had helped Baroda BNP Paribas Small Cap NFO mobilise ₹1,103 crore, and Edelweiss Multi-cap attracted investment of ₹975 crore during the NFO.

Siddharth Chavan, CEO of Money Matter Advisors, said the bullish equity market lifts investors’ sentiments all across, and it was no wonder that mutual funds have made most of it.

On the other hand, it was almost a wash-out for IPOs in the March quarter, with just four companies raising just ₹880 crore while mutual funds invested ₹20,173 crore through 57 NFOs in the same period, he added.

Hybrid category

Hybrid NFOs also sold like a hot cake, snatching investments from debt funds, which suffered due to the removal of long-term capital benefits in April.

The NFOs in the hybrid category mopped up ₹9,684 crore with an inflow of ₹7,480 crore in the September quarter alone.

Notwithstanding the run-up in equity markets, mutual funds have managed to raise ₹9,863 crore through debt fund NFOs, with a major inflow of ₹6,061 crore and ₹3,602 crore coming in during the March and September quarters.

Interestingly, passive funds, including funds of funds investing overseas, got an investment of ₹3,287 crore during the NFO, with 31 index funds raising ₹1,917 crore in the March quarter.

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