The fund raise through new fund offers by mutual funds have hit over four-year low of ₹350 crore last month against ₹4,085 crore logged in March on the back of growing uncertainty in the equity market due to geopolitical tensions.
Last month, MFs have floated only 7 NFOs against 30 logged in the previous month, according to the Association of Mutual Funds in India data.
The fund raise in April was lowest since the covid lockdown hit year when the industry managed to mop-up just ₹195 crore in June, 2020. Incidentally, in May and June 2022 the industry did not raise any fund through NFOs due to SEBI directions.
Though the benchmark indices Sensex and Nifty jumped 4 per cent and 3 per cent last month, the unexpected Pahalgam attack unnerved investors confidence amid concern over slowdown in corporate earning.
Besides the domestic disturbances, the trade tariff imposed by the US across the globe has added to investors concern and gloom on economic growth.
Shridatta Bhandwaldar, Head – Equities, Canara Robeco Asset Management Company said investors should not be too much worried about the latest geo-political tension in the country as the long-term fundamental of the country is still strong.
Asked about the response for its own Multi Asset Allocation NFO launched on Friday amid tension in the border, he said the fund house is not in the market for asset garnering but to offer the best investment option to investors in the current circumstances.
“The new fund launched will be natural fit in the current circumstance since it will make dynamic allocation in equity, debt, gold and silver to provide natural diversification for investors,” he said.
Besides poor fund raise through NFO, the inflow into open-ended equity funds itself has fallen 41 per cent last month to ₹24,269 crore against ₹41,156 crore in December due to market volatility.
Puneet Singhania, Director, Master Trust Group said rising tensions between India and Pakistan are likely to dominate investor sentiment, creating a cautious undertone in Indian equity markets as any escalation along the border or strong diplomatic developments could lead to uncertainty.
Alongside geopolitical concerns, the ongoing Q4 corporate earnings season will continue to drive stock-specific action. Further developments on both geopolitical and corporate fronts will play a crucial role in determining the market direction in coming days, he said.
Published on May 10, 2025