Equity MF inflows decline 25% MoM in Aug'25; NFO activity slows sharply: JM Financial

New Delhi [India], September 14 : Equity mutual fund (MF) inflows, including hybrid schemes but excluding arbitrage, dropped to RS 424 billion in August 2025, marking a 25 per cent month-on-month (MoM) and 8 per cent year-on-year (YoY) decline, according to data compiled by JM Financial.

The sharp fall was largely attributed to a weaker new fund offering (NFO) pipeline, which accounted for 61 per cent of the RS 142 billion MoM decline in net inflows.

Equity and hybrid NFO inflows came in at just RS 22 billion in August, significantly lower than the RS 109 billion seen in July. Key launches during the month included the Kotak Active Momentum Fund, Bank of India Mid Cap Fund, Bajaj Finserv Equity Savings Fund, and 360 ONE Multi Asset Allocation Fund. SIP inflows, however, remained stable at RS 282.7 billion, marginally down 0.7 per cent MoM but up 20 per cent YoY.

Arbitrage funds continued to attract investor interest, registering RS 67 billion in inflows, slightly down from RS 73 billion in June. Overall gross sales dropped to RS 773 billion from RS 977 billion in July, while redemptions eased to RS 350 billion the lowest in FY26 so far.

Segment-wise, thematic funds saw the steepest MoM decline in inflows, falling to RS 39 billion from RS 94 billion, reflecting the previous month's NFO-led surge. Small-cap funds also saw inflows decline by RS 15 billion, primarily due to a high base created by the Bajaj Finserv NFO in July.

Equity AUM (including arbitrage) remained flat at RS 43.8 trillion, with a 1.5 per cent negative market impact offset by a 1.1 per cent gain from net inflows.

On the debt side, MFs witnessed outflows of RS 18 billion, while liquid funds saw a reversal of RS 62 billion after a strong July.

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