MFs can’t use ‘IPO’ in offers

Sebi has asked mutual funds to stop using “initial public offering’’ (IPO) and ‘‘at par issue’’ for its first time offering for schemes. This is to avoid the chance of investors considering it as an investment similar to equity shares.

Sebi has asked the Association of Mutual Funds of India (AMFI) to suggest different names for a primary offering, Chairman M. Damodaran said on the sidelines of a ceremony to sign a (LoI) with Securities and Futures Commission of Hong Kong on Thursday. Usage of these words (IPO and at par) may mislead investors as if they are parking money into shares which have a different risk profile, he said. — PTI