When new investors step into the financial world, terms like IPOs (Initial Public Offerings) and NFOs (New Fund Offers) often sound similar-and are mistakenly treated as such.

However, they serve very different purposes. IPOs mark the first time a company offers its shares to the public. Buying into an IPO means owning a stake in that company, with potential for both short-term gains and long-term growth, depending on performance.

On the other hand, NFOs are introduced by mutual fund houses to raise money for a new fund. Investors buy units at a starting NAV (Net Asset Value) of ₹10, but unlike IPOs, there’s no listing-day gain or price jump. The ₹10 value is just a nominal price-not a discount or guaranteed return.

Many retail investors confuse NFOs with IPOs due to aggressive marketing, time-limited offers, and the “get in early” mentality. This often leads to disappointment, as mutual fund performance is realized only over the long term.

Before investing, one must evaluate the fund's strategy, the track record of the fund house, and whether the investment aligns with long-term goals. Avoiding hype and understanding the core difference can help investors make smarter, more informed financial choices.