Record number of equity NFOs in '14

Equity new fund offers (NFOs), which had gone out of favour after the global financial crisis, made a strong comeback in 2014. The Indian mutual fund sector launched a record 75 NFOs in the equity segment during the year, amid a 30 per cent surge in benchmark indices.

Asset management companies (AMCs) mopped up Rs 12,200 crore through these new offers.

Most of NFOs were close-ended schemes, which have fixed lock-in periods. About 51 of NFOs were close-ended products with a lock-in period of up to five years. The amount mobilised by closed-end schemes was almost 80 per cent of the total amount raised through NFOs.

Fund houses like Sundaram MF, ICICI Pru AMC, Birla Sun Life AMC, Reliance MF and UTI MF among others were the key players to offer close-ended products to investors.

Despite high volatility in December, 13 closed-end equity products, most in month in 2014, were launched by AMCs, collecting a total of Rs 2,222 crore.

The regulator has discouraged funds from paying unreasonably high payouts. Sectoral players say the trend of NFOs could continue this year as well with several AMCs already in the process of coming to the market.