Indian mutual fund AUM to surpass ₹100 lakh crore mark in 2-3 years: ICRA Analytics

The Indian mutual fund industry will continue to grow by leaps and bounds in the coming years. The industry, which has witnessed over five-fold growth in assets under management (AUM) in the last ten years, is well on track to surpass the ₹100 lakh crore AUM mark in the next two-to-three years, notes ICRA Analytics in its report dated July 19.

The industry’s AUM, which had crossed the ₹50 lakh crore mark for the first time in December 2023, has surpassed ₹60 lakh crore in a span of just six months and stood at ₹ 61.16 lakh crore in June 2024, the report added.

The sum total SIP contributions for the first half of 2024 surpassed ₹1 lakh crore level and stood at ₹1.20 lakh crore. Monthly SIP contribution continued to remain above ₹20,000 crore for the third consecutive month as it rose to a new high of ₹21,262 crore in June 2024. SIP contributions increased by nearly 44% on a year-on-year (YoY) basis.

"The resilience of the Indian financial market and improved growth prospects of the Indian economy is boosting investor confidence leading to increased participation of retail investors. This is auguring well for the mutual fund industry, which has been witnessing a robust growth in inflows and a surge in contribution through the SIP route," said Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics.

The net AUM increased by nearly 38% (37.77%) to touch ₹61.16 lakh crore in June 2024, up from ₹44.39 lakh crore in June 2023. On a month-on-month basis, the net AUM increased by nearly 4% (3.81%) from ₹58.91 lakh crore in May 2024. Interestingly, the industry’s AUM has grown by 527% over the past decade from ₹9.75 lakh crore in June 2014 to ₹61.16 lakh crore in June 2024.

“India is in a bright spot in the global economy. Reformatory measures adopted by the Indian government and strong macroeconomic fundamentals bodes well for the Indian economy and the Indian mutual fund industry. Market regulator SEBI has adopted a slew of measures which has improved the transparency and accountability of the mutual fund industry. This, in turn, has helped boost investor confidence leading to increased participation,” Kumar added.