According to Mr. Nimesh Shah, the managing director of ICICI Prudential Mutual Fund, the Mutual Funds (MF) industry is poised to represent a significant portion of the banking sector by 2030, with the total industry size expected to exceed Rs. 100 trillion (equivalent to US$ 120.10 billion) in the coming decade. Mr. Shah made this projection during a panel discussion at the Business Standard BFSI Insight Summit 2023 in Mumbai, emphasizing the transformative role of digital technology in the MF market’s growth. He noted that MF companies have expanded their reach to approximately 200 locations nationwide and mentioned the potential for substantial expansion with the right strategies and initiatives.
During the same event, Mr. Nilesh Shah, managing director of Kotak Mahindra Asset Management, stressed the importance of raising awareness to reach new customers. He highlighted the need for distributors to extend the reach of MFs to rural areas and advocated for transparency and disclosure standards that create a level playing field in the industry.
Mr. A Balasubramanian from Aditya Birla Sun Life Mutual Fund drew a comparison to China’s telecom industry, noting that while India started later, the mutual fund sector has made rapid progress in the last ten years, and he anticipates further accelerated growth in the next five years.
Mr. Navneet Munot, managing director and CEO of HDFC Mutual Fund, acknowledged that while MF penetration has improved, the sector has only scratched the surface, with a relatively small customer base of 40 million individuals. He attributed part of the industry’s growth to the “Mutual Funds Sahi Hai Campaign” supported by AMFI and MFs, and he anticipates that the popularity of Systematic Investment Plans (SIP) will attract more customers.
Ms. Radhika Gupta, Managing Director and Chief Executive Officer of Edelweiss Mutual Fund, commended the industry’s collective effort in the “MF Sahi Hai” campaign, noting that it has resulted in a noteworthy retail SIP book, which has surprised many observers.
Mr. Swarup Mohanty, Chief Executive Officer of Mirae Asset Mutual Fund, emphasized that every industry experiences inflection points, and for the MF sector, this transformation began with demonetization, leading to a shift from fixed assets to financial assets. The COVID-19 pandemic further accelerated this shift, and India’s growing per capita income has fueled the desire for investment.
