Aditya Birla Sun Life, Axis MF call off NFOs on tepid investor response

Decisions come after launch period is over; experts say one reason for failure of the NFOs was investors' rush for select debt schemes in the last week of March

Two fund houses have called off their new fund offers (NFOs) after the last day of their launches on April 5. The NFOs in question are Aditya Birla Sun Life CRISIL IBX SDL Sep 2028 index fund and Axis S&P 500 ETF FoF.

Fund houses usually call off their NFOs when the schemes fail to garner the prescribed minimum amount during the launch period. Under MF regulations, debt fund and balanced fund NFOs need to collect a minimum of Rs 20 crore. For other schemes, the threshold is Rs 10 crore.

MF investment platform BSE Star MF said that money invested in both NFOs will be returned to investors. "NFO purchase orders rejected with remarks such as 'NFO called off due to the minimum amount not met', shall be released to client’s bank account," the platform said in a notification.

According to MF distributors, one reason for the failure of two NFOs was investors' rush for select debt schemes in the last week of March. Investors poured in over Rs 40,000 crore into medium-to-longer duration debt schemes to take the advantage of preferential taxation before the change of rules came into effect on April 1. The change in taxation was announced by the government on March 24.