The report projects mutual fund assets under management (AUM) to exceed ₹300 lakh crore by 2035, while direct equity holdings could reach ₹250 lakh crore. The findings point to a structural shift in household behaviour as more families move from a savings-led approach toward long-term, market-linked investments.
Mutual fund penetration among households is expected to rise from 10% to 20% over the next decade. The report notes that much of this growth will come from mass and mass-affluent households outside the top 30 cities. Cities beyond the top 110 contributed 19% of mutual fund AUM in FY25, up from 10% in FY19, indicating wider geographical participation. Long-term investing also appears to be taking root, with over-five-year mutual fund holdings doubling to 16% and similar SIP tenures rising sharply.
“Indian households are steadily shifting from a traditional savings mindset to a more investment-oriented approach,” said Saurabh Trehan, Partner and Head of Bain & Company’s Financial Services practice in India.
He added that younger and first-time investors, especially those outside major metros, are driving a deeper domestic investor base.
The equity investor base is also set for rapid expansion. An estimated nine crore additional retail investors—primarily Gen Z and millennials—are expected to enter the markets, aided by digital onboarding, improved financial literacy, and strong market performance. Younger investors under 30 now account for 40% of NSE-registered investors, compared to 23% in FY19.
The report highlights a “democratisation of investing,” marked by broader participation from women and smaller urban centres.
Women now represent 25% of investors, up from 20% in FY19. Mutual fund folios have grown 2.5 times in five years even as individual ticket sizes remain modest, reflecting the entry of a large new cohort of first-time investors. SIP inflows have recorded a 25% CAGR over the past decade, driven largely by 18- to 34-year-olds.
Digital channels continue to reshape retail investing. Around 80% of equity investors and 35% of mutual fund investors are being onboarded through digital platforms, the report said. Nearly half of all digital investment activity now comes from Tier-2 and smaller cities.
“We are witnessing a definitive structural shift… the ecosystem has become more accessible and trusted,” said Harsh Jain, co-founder and COO of Groww.
The report also stresses the broader economic implications of rising retail participation. Higher investor activity is contributing to deeper liquidity in capital markets, enabling more primary issuances, including from small and medium enterprises. SME IPO proceeds have risen from about ₹1,800 crore in FY19 to nearly ₹6,000 crore in FY24. Retail investing is also projected to generate more than seven lakh jobs across the financial ecosystem and allied sectors.
Rakesh Pozhath, Partner at Bain & Company, said India is “entering a new era of retail investing” with domestic inflows helping bolster market resilience, especially during volatile periods.
