Asset management companies have raised Rs 1.18 lakh crore through 239 New Fund Offerings (NFOs) in 2024. In this, sectoral or theme based equity funds emerged as the first choice of investors. This came to light from the report released by Germinate Investor Services Research on Monday. Before this, Rs 63,854 crore was raised through 212 NFOs in 2023 and Rs 62,187 crore was raised through 228 NFOs in 2022. In the year 2020, which was badly affected by the Covid-19 pandemic, asset management companies had raised Rs 53,703 crore through 81 new offerings.
This upward trend in the rate of NFO issuance reflects a strong growth trajectory and increasing investor confidence. NFOs are usually brought in during a bullish market environment, when investor sentiment is high and optimistic. NFOs were launched to take advantage of this optimistic trend of investors and attract investments. Industry experts said the stock market performance as well as positive investor sentiments led to more funds being raised through NFOs in 2024.
According to the report, last year, sector-specific or theme-based funds, index funds and exchange traded funds (ETFs) gained significant interest from investors. “During this period, 53 NFOs raised Rs 79,109 crore and these funds emerged as the first choice of investors,” the report says.
Equity funds created for specific sectors or themes have become popular among investors due to their focused approach and synergy with market trends. For the full year 2024, the Sensex rose 5,898.75 points or 8.16 percent and the Nifty rose 1,913.4 points or 8.80 percent.