Axis Mutual Fund is expected to cut at least Rs 200 crore from new fund offers in Nifty-tracking SDL or state government securities during the main sale.

The open-ended target maturity index fund will invest in constituents of the Nifty SDL September 2026 index, the fund house said in a statement on Friday.

The New Fund Offer (NFO), which began on Friday and ended on November 16, said it did not disclose how much the company was targeting to receive. However, the fund’s chief business development officer Raghav Iyengar told PTI that the company had set an internal target of at least Rs 200 crore during the NFO period.

The company said the fund has no exit burden and will be managed by Aditya Pagaria. A state-backed debt fund, an NFO is an open-ended target-maturity index fund with a high-interest rate and low credit risk.

The scheme’s objective is to provide an investment return corresponding to the total return of the securities represented by the Nifty SDL Sep 2026 Index.

Targeted maturity funds allow investors to access a specific maturity period, and this transparency of investment strategy provides investors with a clear view of the portfolio and instrument mix. As a passive fund, the scheme replicates designated indices created by well-known index providers.

State securities are among the most liquid instruments in the debt market. They typically trade at a premium to comparable central government securities (G-secs), with yields averaging 40-50 basis points higher than G-secs.