The mutual fund industry in India has grown exponentially over recent years, becoming a major player in the country’s capital market. According to the latest Economic Survey, mutual funds now account for almost one-third of total capital market participation in India, a remarkable achievement considering the rapid pace of growth.
As of December 2024, the Indian capital market has around 17 crore unique investors. This includes both mutual fund investors and direct investors. Among these, 5.20 crore are mutual fund investors, representing 30.6% of the total capital market participants. This growth reflects the increasing popularity of mutual funds as an investment vehicle in India.
One of the most notable developments in the mutual fund industry is the growing share of retail investors. Retail investors now contribute a significant portion of the total Assets Under Management (AUM) in the mutual fund industry, amounting to ₹18.60 lakh crore. This shows that a substantial part of the industry’s growth is driven by individual investors seeking to diversify their portfolios.
Systematic Investment Plans (SIPs) have emerged as a popular method for retail investors to invest in mutual funds. The Economic Survey highlights that there are approximately 10 crore SIP accounts, with total inflows of ₹10.90 lakh crore since the inception of SIPs. This trend underscores the increasing willingness of investors to make regular investments in mutual funds, regardless of market conditions.
The average monthly SIP inflow has experienced a significant increase. In FY25, the size of the average monthly SIP inflow has more than doubled to ₹23,000 crore, compared to ₹10,000 crore in FY22. This sharp rise indicates a growing confidence in mutual funds and a shift towards long-term wealth creation strategies among Indian investors.
The mutual fund industry’s influence extends beyond just individual investors. Mutual funds have significantly increased their ownership of NSE-listed companies. As of September 2024, mutual funds own 9.5% of the total equity in NSE-listed companies, up from 8.7% in March 2024. This growth in ownership highlights the increasing role of mutual funds in the Indian stock market, as they continue to build larger stakes in key companies.
When looking at the overall ownership of NSE-listed companies, individual investors—both direct investors and those investing through mutual funds—now control 17.6% of the total equity. This is on par with the share held by Foreign Portfolio Investors (FPIs), reflecting the rising importance of domestic investors in shaping the capital market landscape in India.
The mutual fund industry in India is evolving rapidly, with significant growth in investor participation and market impact. The rise in SIP inflows, growing retail participation, and increased ownership in NSE-listed companies all point to the expanding influence of mutual funds in India’s capital market. As more investors turn to mutual funds for wealth creation, the industry is expected to continue its strong growth trajectory, contributing to the broader development of India’s financial ecosystem.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 26, 2025, 2:10 PM IST
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