Mumbai, Dec 23 (IANS) India’s mutual fund industry’s assets under management (AUM) may surpass Rs 300 trillion by 2035, fuelled by digital adoption, rising participation from Gen Z, women, and households in smaller towns, as well as the shift toward long‑term investing through SIPs, a report showed on Tuesday.

The Indian mutual fund industry witnessed a remarkable expansion in 2025, with AUM climbing to Rs 81 trillion in November 2025, up from Rs 68 trillion in November 2024 — registering a year-on-year growth of 18.69 per cent and nearly tripling over the past five years posting a CAGR of 21.91 per cent.

Sustained net inflows, strong market performance, and deepening retail participation, aided by digitisation and financialisation of savings, have contributed to the steady surge in AUM, said ICRA Analytics in its report.

As of May 2025, the industry’s AUM had surpassed Rs 70 trillion-mark, and within next six months, the same crossed the Rs. 80 trillion-mark, despite global uncertainties.

Given this trajectory, market participants are of the opinion that India is well‑positioned to cross the Rs.100 trillion threshold within the next few years, if current inflow trends and market performance persist.

“Beyond Rs. 100 trillion, the long‑term outlook points to even more transformative growth. The geopolitical situation and global uncertainties notwithstanding, the domestic mutual fund industry has showcased resilience backed by a sense of optimism regarding the growth prospects of the Indian economy,” said Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics.

The AUM of open-ended equity funds quadrupled over 5-year period from Rs. 9 trillion in November 2020 to Rs. 36 trillion in November 2025.

On a year-on-year basis, the same went up 17.45 per cent from Rs. 30 trillion in November 2024.

“Flexi‑cap funds tend to show strong YoY growth because of a combination of strategic flexibility, diversified exposure, and favourable market conditions. The flexi cap fund category is closely followed by multi-cap fund and large and mid cap fund categories, which were up by 24.78 per cent and 22.78 per cent YoY,” Kumar said.

The corpus of debt funds too went up 14.82 per cent YoY from Rs. 17 trillion in November 2024 to Rs. 19 trillion in November 2025.

In the equity fund performance space, the small cap funds witnessed maximum growth over 5- and 10-year tenures, reporting a CAGR of 24.91 per cent and 16.70 per cent, respectively (as on November 30).

Systematic Investment Plans (SIPs) have emerged as one of the strongest and most reliable engines of growth for the Indian mutual fund industry.

By November 2025, SIP AUM had reached Rs. 16.53 trillion, accounting for more than 20 per cent of the mutual fund industry’s total AUM, highlighting their pivotal role in boosting long‑term asset accumulation.

“The burgeoning middle class and rising financial literacy is prompting more and more people to resort to financial planning so as to accrue savings, particularly through the SIP route,” Kumar said.

—IANS

na/