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India’s mutual fund industry could be on track for one of its most significant structural expansions, with assets under management (AUM) projected to surpass ₹300 lakh crore by 2035, driven by sustained retail participation, rising SIP adoption and deeper penetration beyond top cities, according to ICRA Analytics.
From a base of around ₹70 alkh crore in May 2025, the industry crossed the ₹80 lakh crore mark within just six months, reaching about ₹81 lakh crore in November 2025 despite global volatility.
If current inflow trends and market conditions hold, industry participants expect the ₹100 lakh crore milestone to be achieved within the next few years.
ICRA Analytics data show that the industry’s AUM grew 18.69% year-on-year in November 2025, rising from ₹68 trillion a year ago. Over the past five years, assets have nearly tripled, translating into a compounded annual growth rate of nearly 22%.
The expansion has been supported by steady net inflows, favourable market performance and a broader shift of household savings towards financial assets.
“The domestic mutual fund industry has shown resilience amid geopolitical and global uncertainties, backed by optimism on India’s economic growth and a steadily widening investor base,” said Ashwini Kumar, Senior Vice President and Head – Market Data at ICRA Analytics.
He pointed to increasing participation from Gen Z investors, women and first-time investors in smaller cities as a key structural driver.
Equity funds lead, debt gains traction
Open-ended equity funds have been a major contributor to AUM growth, with assets quadrupling over five years from ₹9 lakh crore in November 2020 to about ₹36 lakh crore in November 2025.
On a year-on-year basis, equity fund AUM rose over 17%.
Within equities, flexi-cap funds recorded the fastest growth, expanding more than 25% year-on-year to ₹5.45 lakh crore. Multi-cap and large-and-mid-cap funds followed closely, reflecting investor preference for diversified strategies amid changing market conditions.
Debt funds also posted steady gains, with total assets rising nearly 15% year-on-year to ₹19 lakh crore. Money market funds stood out, growing over 40% during the period, supported by demand for liquidity and lower interest-rate sensitivity. Ultra-short and low-duration funds also saw strong inflows, underlining a preference for relatively stable, short-term instruments.
SIPs emerge as growth backbone
Systematic Investment Plans have become the backbone of long-term asset accumulation. By November 2025, SIP AUM had reached ₹16.53 lakh crore, accounting for over one-fifth of the industry’s total assets.
Monthly SIP contributions rose more than 16% year-on-year to nearly ₹29,500 crore, highlighting the growing role of disciplined investing.
Performance trends also indicate a sustained appetite for equities over longer horizons. Small-cap funds delivered the highest compounded returns over five- and ten-year periods, while in the debt segment, credit risk funds topped one- and three-year return charts.
Smaller towns deepen footprint
The investor base is also widening geographically.
Assets from beyond the top 30 cities (B30 locations) accounted for over 27% of individual investor holdings in November 2025, up slightly from the previous year.
While institutional assets remain concentrated in major centres, retail participation from smaller towns continues to rise, supported by expanding AMC distribution networks and digital platforms.
At the same time, direct investing is gaining ground. Nearly 28% of retail assets and close to half of total industry assets were invested directly in November 2025.
ALSO READ | Jio BlackRock AMC keeps debt exposure short, eyes selective equity bets amid volatile markets
From a base of around ₹70 alkh crore in May 2025, the industry crossed the ₹80 lakh crore mark within just six months, reaching about ₹81 lakh crore in November 2025 despite global volatility.
If current inflow trends and market conditions hold, industry participants expect the ₹100 lakh crore milestone to be achieved within the next few years.
ICRA Analytics data show that the industry’s AUM grew 18.69% year-on-year in November 2025, rising from ₹68 trillion a year ago. Over the past five years, assets have nearly tripled, translating into a compounded annual growth rate of nearly 22%.
The expansion has been supported by steady net inflows, favourable market performance and a broader shift of household savings towards financial assets.
“The domestic mutual fund industry has shown resilience amid geopolitical and global uncertainties, backed by optimism on India’s economic growth and a steadily widening investor base,” said Ashwini Kumar, Senior Vice President and Head – Market Data at ICRA Analytics.
He pointed to increasing participation from Gen Z investors, women and first-time investors in smaller cities as a key structural driver.
Equity funds lead, debt gains traction
Open-ended equity funds have been a major contributor to AUM growth, with assets quadrupling over five years from ₹9 lakh crore in November 2020 to about ₹36 lakh crore in November 2025.
On a year-on-year basis, equity fund AUM rose over 17%.
Within equities, flexi-cap funds recorded the fastest growth, expanding more than 25% year-on-year to ₹5.45 lakh crore. Multi-cap and large-and-mid-cap funds followed closely, reflecting investor preference for diversified strategies amid changing market conditions.
Debt funds also posted steady gains, with total assets rising nearly 15% year-on-year to ₹19 lakh crore. Money market funds stood out, growing over 40% during the period, supported by demand for liquidity and lower interest-rate sensitivity. Ultra-short and low-duration funds also saw strong inflows, underlining a preference for relatively stable, short-term instruments.
SIPs emerge as growth backbone
Systematic Investment Plans have become the backbone of long-term asset accumulation. By November 2025, SIP AUM had reached ₹16.53 lakh crore, accounting for over one-fifth of the industry’s total assets.
Monthly SIP contributions rose more than 16% year-on-year to nearly ₹29,500 crore, highlighting the growing role of disciplined investing.
Performance trends also indicate a sustained appetite for equities over longer horizons. Small-cap funds delivered the highest compounded returns over five- and ten-year periods, while in the debt segment, credit risk funds topped one- and three-year return charts.
Smaller towns deepen footprint
The investor base is also widening geographically.
Assets from beyond the top 30 cities (B30 locations) accounted for over 27% of individual investor holdings in November 2025, up slightly from the previous year.
While institutional assets remain concentrated in major centres, retail participation from smaller towns continues to rise, supported by expanding AMC distribution networks and digital platforms.
At the same time, direct investing is gaining ground. Nearly 28% of retail assets and close to half of total industry assets were invested directly in November 2025.
ALSO READ | Jio BlackRock AMC keeps debt exposure short, eyes selective equity bets amid volatile markets
