Riding on intense retail investors’ interest and a sharp rally in equity markets, asset management companies (AMCs) launched 176 new fund offers (NFOs) in 2021-22, garnering a whopping Rs 1.08 lakh crore. 

With liquidity tightening, interest rates on the rise, stock market consolidation in progress, return to work from office, there could be subdued interest in NFOs going forward. While the fixed maturity plans (FMPs) category could see considerable launches, the same cannot be expected from other categories, Gopal Kavalireddi, the head of research at FYERS, has said.

Also, almost all AMCs have launched new schemes across most categories, thereby filling the earlier existing product gaps that were created post-recategorisation, he has added. 

“Gaps in investment objectives, interest of investor in specific themes, availability of funds for deployment, credibility and reputation of fund managers and performance of stock markets could dictate the quantum of new launches,” he has said. 

According to the data compiled by Morningstar India, there were 176 new fund offers (including closed-end funds and ETFs) in 2021-22. These managed to collect a staggering Rs 1,07,896 crore during their inception stage. 

This was way higher than 84 NFOs floated in 2020-21 and cumulatively, these funds were able to mobilise Rs 42,038 crore. 

Usually, NFOs come during a surging market when investor sentiment is high and optimistic. The stock market, along with the positive investor sentiments, kept surging post-March 2020, leading to the launch of higher number of NFOs.