The basics
What is NFO?
An NFO is the first subscription period of a new mutual fund scheme, when units are usually offered at ₹10.
How it works
During the NFO the fund house collects money for a new scheme. Units are allotted within 5 working days after the offer closes, and an open-ended scheme then reopens for daily buying and selling at its NAV.
The ₹10 price is not a discount. A new fund at ₹10 and an existing fund at ₹100 give you the same value for your money; what you get depends on what each fund then earns.
Example
You put ₹50,000 into an NFO at ₹10 a unit and get 5,000 units (less stamp duty). Their value from then on moves with the scheme's NAV.
Keep in mind
- A new fund has no track record; ask what it offers that existing funds in its category do not.
- Read the scheme documents for its strategy, benchmark and costs.
Questions people ask
Is an NFO cheaper than an existing fund?
No. The unit price does not make a fund cheap or expensive.
When will I get units after an NFO?
Within 5 working days of the offer closing.
Related terms
General information for education, not investment advice or a recommendation of any scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future. Last reviewed 25 October 2026.