April 14, 2023
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Aditya Birla Sun Life & Axis MF call off NFOs on tepid investor response
Two fund houses, Aditya Birla Sun Life, Axis MF 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. The money invested in both NFOs will be returned to investors.
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.
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.
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