FY25 sees NFO flows of ₹1.09 Trillion, despite modest Q4

16 Apr 2025 , 11:02 AM

NFOS BOUNCE BACK IN FY25, DESPITE TEPID FOURTH QUARTER

Fiscal year FY25 has seen a 63.5% improvement in NFO collections, compared to FY24. New fund offerings (NFOs) are the mutual fund equivalent IPOs, and are usually issued by mutual fund AMCs to complete their array of offerings. However, quite often, NFOs are also issued by mutual fund AMCs to capitalize on a certain trend like thematic funds in the last two years or Balanced Advantage Funds (BAFs) about 3 years back. While, the NFO flows in FY25 have been robust, the last quarter did not perform up to the expectations.

There were a total of 245 NFOs in fiscal year FY25, which collected a total of ₹1,08,494 Crore from investors. This is 63.5% higher than the NFO collections of ₹66,364 Crore recorded in fiscal year FY24. However, if one looks at the break-up of the category of NFOs, FY25 has been substantially dominated by the thematic funds. Thematic funds had dominated in FY24 also, but in FY25, the dominance of these sectoral & thematic funds was a lot more decisive. Let us start with a quick recap of NFO flows in fiscal year FY24.

RECAP FY24 – NFO STORY SUBDUED; THEMATIC FUNDS SHINE

Like in FY23, the NFO flows were relatively tepid in FY24 too; as can be seen from the table below. This is despite FY24 being a robust year for Nifty and Sensex performance.

Calendar 2023	No. of NFOs	Generic Equity MF	Thematic Funds	Flexi Caps	Index Funds	Index ETFs	Close End FTPs	Hybrid Funds	Income Funds	Monthly NFO Flow
Apr-23	9	0	1,612	0	34	10	0	101	71	1,828
May-23	5	0	174	0	142	0	103	64	0	483
Jun-23	11	101	2,717	220	63	15	0	112	0	3,228
Jul-23	17	0	1,540	1,471	176	122	0	0	3,414	6,723
Aug-23	15	0	2,556	2,446	31	63	188	2,247	0	7,531
Sep-23	16	0	1,629	874	6	53	0	5,233	0	7,795
Oct-23	14	1,103	918	975	71	346	0	199	26	3,638
Nov-23	14	41	1,342	551	96	10	447	96	0	2,583
Dec-23	21	2,062	4,259	0	167	64	2,060	1,260	0	9,872
Jan-24	20	0	284	683	976	243	384	4,247	0	6,817
Feb-24	22	1,514	7,178	0	696	582	251	1,499	0	11,720
Mar-24	21	0	3,074	0	178	70	319	396	109	4,146
FY24 Total	185	4,821	27,283	7,220	2,636	1,578	3,752	15,454	3,620	66,364
Share		7.26%	41.11%	10.88%	3.97%	2.38%	5.65%	23.29%	5.45%	100.00%

Data Source: AMFI (₹ in crore, except number of NFOs)

Here is what we read from the NFO collection data for FY24.

• In FY24, total NFO collections of ₹66,364 Crore across 185 NFOs translated into a monthly average of ₹5,530 Crore.
• If you look at quarter-wise distribution of NFO collections; Q1 was tepid at 8.4%. However, Q2, Q3, and Q4 accounted for 33.2%, 24.3%, and 34.2% respectively.
• Out of the total NFO collections of ₹66,364 Crore in FY24, thematic funds dominated collections with 41.1% share of NFO fund raising. Other significant contributions came from hybrid funds (23.3%), and flexi-cap funds (10.9%).

FY24 was relatively better than FY23, but the real story was in the virtual dominance of thematic fund NFOs; a trend that was to continue in the next fiscal year too.

FY25 NFOS CROSS ₹1 TRILLION, BUT Q4 FALTERS

Fiscal year FY25 was a robust year in terms of NFO collections at ₹1.09 Trillion; although the thematic funds once again dominated. Here is a quick dekko.

Fiscal Year FY25	No. of NFOs	Generic Equity MF	Thematic Funds	Flexi Caps	Index Funds	Index ETFs	Close End FTPs	Hybrid Funds	Income Funds	Monthly NFO Flow
Apr-24	9	0	707	512	269	0	0	44	0	1,532
May-24	9	0	9,563	0	242	72	0	263	0	10,140
Jun-24	17	345	12,974	1,051	39	48	0	770	0	15,227
Jul-24	15	0	9,790	3,945	2,651	179	0	0	0	16,565
Aug-24	18	865	10,202	0	771	113	0	1,297	567	13,815
Sep-24	27	1,734	7,842	297	3,656	102	0	872	72	14,575
Oct-24	29	180	3,517	350	1,895	136	0	0	0	6,078
Nov-24	18	358	2,751	0	523	11	0	140	269	4,052
Dec-24	33	0	11,337	65	1,361	19	209	788	73	13,852
Jan-25	12	1,069	2,838	0	71	6	0	0	560	4,544
Feb-25	28	0	2,072	423	671	65	72	445	281	4,029
Mar-25	30	196	261	0	2,049	102	0	549	928	4,085
FY25 Total	245	4,747	73,854	6,643	14,198	853	281	5,168	2,750	1,08,494
Share		4.38%	68.07%	6.12%	13.09%	0.79%	0.26%	4.76%	2.53%	100.00%

Data Source: AMFI (₹ in crore, except number of NFOs)

Here is what we read from the NFO collection data for FY25.

• In FY25, total NFO collections of ₹1,08,494 Crore across 145 NFOs translated into a monthly average of ₹9,041 Crore.
• If you look at quarter-wise distribution of NFO collections; Q4 was tepid at 11.7%. However, Q1, Q2, and Q3 accounted for 24.8%, 41.4%, and 22.1% respectively.
• Out of the total NFO collections of ₹1,08,494 Crore in FY25, thematic funds once again dominated collections with 68.1% share of NFO fund raising. Other significant contributions came from Index funds (13.1%), showing a revival in passive investing.

In terms of NFO collections, FY25 was visibly better than FY24, although thematic funds still dominated. Outside of thematic funds; if hybrid funds played a key role in FY24 NFOs, then it was passive funds in FY25 NFOs. The fiscal year FY25 has highlighted the risks of too much dependence on a narrow category of NFOs. The actual problem became evident only when the tide turned. Hopefully, FY26 should see a much better NFO balance!