Mutual Fund Assets Rise 23% to Record Rs 65.74 Lakh Crore in FY25

Mumbai: Despite bouts of volatility, the Indian mutual fund (MF) industry recorded its strongest growth in the financial year 2024-25, with assets under management (AUM) surging 23.11 per cent to an all-time high of Rs 65.74 lakh crore as of March 2025, according to the Association of Mutual Funds in India (AMFI)'s annual report.

The asset base expanded partly owing to mark-to-market (MTM) gains, spurred by equity markets clocking positive returns, as reflected in the Nifty 50 TRI and Sensex TRI rising 6 per cent and 5.9 per cent, respectively. Debt markets also contributed positively through Mark to Market (MTM) gains, supported by favorable yield movements.

The increase in AUM was also attributed to net inflows summing up to Rs 8.15 lakh crore during fiscal 2025, with number of folios rising to an all-time high at end-March 2025. “Investor participation grew, owing to the industry's efforts to widen awareness of MFs, investor education programmes and the popularity of systematic investment plans (SIPs). In fact, despite bouts of volatility, investors stayed invested, demonstrating a long-term commitment to their financial goals,” noted the AMFI Annual Report 2025.

In this, inflows were mainly skewed in favour of equity-oriented schemes that saw inflows worth Rs 4.17 lakh crore. In a sign of diversification of investments, inflows into debt schemes stood at Rs 1.38 lakh crore, rebounding after three years of successive outflows.

Low interest rates, expectations of further rate cuts from the RBI, and a decline in yields were the key drivers in the debt category, AMFI said. The report said that investors across age groups have raised their allocation to equity. Those under 25 have invested 47 percent of their assets in equity against 41 percent in FY2020. Those between 25-44 years of age have raised their allocation in equity to 60 percent against 36 percent five years ago. Even older investors (45-58 years) have invested 66 percent of their assets in equity against 49 percent earlier. Investors above the age of 59 have invested 56 percent in equity against 40 percent five years ago.

Notably, more than half of India’s mutual fund assets was concentrated in top five cities. As of March 2025, the top five cities – Mumbai, New Delhi, Bengaluru, Pune, and Kolkata – collectively account for over half (52.52 per cent) of the country's MF AUM. Mumbai holds 27 per cent, New Delhi 12.63 per cent, Bengaluru 5.39 per cent, Pune 4 per cent and Kolkata 3.49 per cent. This distribution is consistent with the previous year's trend.

India’s MF AUM-to-GDP ratio has reached an all-time high of 19.9 per cent of GDP as of March 2025. The Annual report noted that India’s MF penetration is significantly lower than that of many developed economies.

"The outlook remains optimistic, backed by increasing investor participation and favourable macroeconomic indicators,” said Venkat N Chalasani, Chief Executive of AMFI.

Folio count continues to tick up--- The total number of folios increased to 23.45 crore in fiscal 2025 from 17.78 crore in fiscal 2024, i.e. an on-year rise of around 32 per cent. A notable trend in the fiscal was a sharp 33.4 per cent on-year increase in folios of growth/equity-oriented schemes, to 16.38 crore (12.28 crore in fiscal 2024). Equity scheme folios continued to constitute a lion share of the folios, at 70 per cent. The folios of hybrid schemes also increased a notable 16.1 per cent while other schemes, including index funds and exchanged-traded funds (ETFs), surged 48.3 per cent. In contrast, income/debt-oriented scheme folios declined 3 per cent to 69.49 lakh.

Flows into Systematic Investment Plans (SIPs) rose sharply, with yearly contributions increasing 45.24 per cent on-year in fiscal 2025 to Rs 2.89 lakh crore. This substantial increase, along with MTM gains, saw SIP assets rise 24.59 per cent on-year, to Rs 13.35 lakh crore, thereby accounting for 20.31 per cent share of the overall MF industry's AUM. Investors continued to have a considerable appetite for the investment avenue, with new SIP accounts registered during the year rising to 6.80 crore vs 4.28 crore in fiscal 2024.