URL copied IPO vs NFO: Which is better for investment - Basic difference, risk assessment Investing in any fund or scheme involves some amount of risk. And when it comes to investing in securities, the risks are very high. But a deep understanding of the fund or scheme could help you minimize the risk and multiple your money many fold. Here we will discuss about two most lucrative investment options --Â Initial Public Offering (IPO) and New Fund Offering (NFO). Government and private companies need funds to expand their operations and therefore they turn to public investors to raise funds. There are two common ways a company can collect funds from the public investors. The options are IPO and NFO. It is often noticed that investors get confused between IPOs and NFOs as they presume that both offer similar opportunities for investment because they are primary market offerings. But both are no way similar to each other.