The initial subscription period during which a new mutual fund scheme is offered to investors for the first time.
A New Fund Offer (NFO) is similar to an IPO for stocks — it is the first time a mutual fund scheme is open for public subscription. During the NFO period, units are typically offered at a face value of ₹10.
When a fund house launches a new fund, it opens for subscriptions during the NFO period (usually 15–30 days). After the NFO closes, the fund manager deploys the collected money into securities and the fund trades at daily NAV.
The fund house files a Scheme Information Document (SID) with SEBI describing the fund's investment mandate.
The NFO opens for a fixed period. Investors subscribe at ₹10 per unit.
Post NFO, the fund closes, corpus is deployed, and NAV is declared daily thereafter.
Some NFOs are open-ended (always open to new investors post NFO) and some are closed-ended (no new subscriptions after NFO).