An NFO, or New Fund Offer, is the period during which a mutual fund house first launches a new scheme to the public, typically offering units at a fixed initial price, often ₹10 per unit, for a limited window of a couple of weeks before the fund officially opens for regular ongoing purchases and redemptions at its market-linked NAV.
A common misconception is that an NFO is like an IPO — a rare chance to buy ‘cheap’ before the price rises. In reality, a mutual fund's NAV simply reflects the value of the assets it holds, so buying at ₹10 in an NFO offers no inherent advantage over buying an existing fund at a higher NAV. Since an NFO has no track record yet, it's generally wiser to evaluate it purely on the fund manager's strategy and pedigree, not on the low starting price.