Mutual fund NFOs are exactly like equity IPOs
An NFO is usually for fresh fundraising, and there are no limits to the amount of funds it can raise, so the supply is unlimited.
Whereas equity IPOs are different. IPO is either in the nature of fresh funds being raised for the company or in the form of an offer for sale (OFS).
Also, you can’t make IPO gains in NFOs because the IPOs price is determined by the forces of demand and supply.
But the NFO has nothing to do with demand as the supply is anyway unlimited. NFO price is fixed at ₹10 in all cases.
Read about the other reasons to avoid investing in NFOs here.
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