The Indian mutual fund sector is witnessing substantial expansion, with net inflows soaring by 135% and assets under management (AUM) increasing by nearly 39% within the past year. A recent ICRA Analytics report highlights that mutual fund inflows reached a significant US$ 7.09 billion (Rs. 60,295.30 crore) in November 2024, compared to US$ 3.01 billion (Rs. 25,615.65 crore) in the same month of 2023. This growth has propelled the AUM to an all-time high of US$ 800.09 billion (Rs. 68,08,000 crore), up from US$ 576.45 billion (Rs. 49,05,000 crore) a year ago. A major factor driving this surge is the increase in equity fund inflows, which rose by 131.35% to US$ 4.22 billion (Rs. 35,943.49 crore) in November 2024. Since January 2024, equity mutual fund inflows have surged by 65.03%, reaching US$ 2.56 billion (Rs. 21,780.56 crore) alone.
Despite global market challenges, such as slow growth, rising protectionism, and geopolitical tensions, the Indian mutual fund market remains robust. A growing base of retail investors and increased awareness in smaller cities are helping sustain optimism. Large-cap funds have also seen a dramatic rise in inflows, increasing by 731% to US$ 299.4 million (Rs. 2,547.92 crore) in November 2024, from US$ 36 million (Rs. 306.70 crore) in November 2023. Additionally, sectoral and thematic funds saw significant inflows, growing by 289.77% to US$ 900 million (Rs. 7,657.75 crore). While volatility in domestic equity markets, especially after disappointing corporate earnings in Q2 FY24, has caused concern, experts anticipate that large and mid-cap funds will attract more investor attention due to heightened market uncertainty. Small and mid-cap funds are expected to retain investor interest, backed by strong corporate governance and government-led growth initiatives.
