Who issues IPOs and who issues NFOs?

An IPO is a way for a company to get money from the public. There are two kinds of IPOs. First, there are Fresh Issues, which are new ways for a company to get money from the market. This money-raising could be used to grow, branch out, pay off debt, etc. Second, companies also do an Offer-for-Sale, or OFS, where promoters or early investors sell their shares through the IPO. In an OFS, the share capital stays the same. The only difference is that the company gets listed.

On the other hand, mutual fund houses or AMCs start NFOs. An NFO is a way to get a new fund idea out into the market. Most NFOs happen when the market is at its peak. Obviously, a lot of these NFO ideas could be limited once SEBI’s new rules for categorising funds are in place. The second most common place where NFOs come from is when AMCs use NFOs to fill in gaps in their fund offerings.

Also check: Apply for NFO Online