India’s mutual fund industry assets under management (AUM) are projected to surpass ₹300 trillion by 2035, driven by rapid digital adoption, rising participation from Gen Z, women, and households in smaller towns, and a growing shift toward long-term investing through systematic investment plans (SIPs), according to a report released on Tuesday.
The industry witnessed strong expansion in 2025, with AUM rising to ₹81 trillion in November 2025 from ₹68 trillion in November 2024, registering a year-on-year growth of 18.69 per cent. Over the past five years, the industry’s AUM has nearly tripled, posting a compound annual growth rate (CAGR) of 21.91 per cent.
Sustained net inflows, robust market performance, and deepening retail participation—supported by digitisation and the financialisation of household savings—have driven the steady rise in AUM, ICRA Analytics said in its report.
As of May 2025, the industry’s AUM had crossed the ₹70 trillion mark and, within the next six months, surpassed ₹80 trillion, despite persistent global uncertainties.
Given this momentum, market participants believe India is well positioned to cross the ₹100 trillion threshold within the next few years, provided current inflow trends and market performance continue.
“Beyond ₹100 trillion, the long-term outlook points to even more transformative growth. Geopolitical risks and global uncertainties notwithstanding, the domestic mutual fund industry has demonstrated resilience, supported by optimism over India’s economic growth prospects,” said Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics.
The AUM of open-ended equity funds quadrupled over the five-year period from ₹9 trillion in November 2020 to ₹36 trillion in November 2025. On a year-on-year basis, equity fund AUM rose 17.45 per cent from ₹30 trillion in November 2024.
“Flexi-cap funds tend to show strong year-on-year growth due to their strategic flexibility, diversified exposure, and favourable market conditions. The flexi-cap category is followed by multi-cap and large-and-mid-cap funds, which grew 24.78 per cent and 22.78 per cent year-on-year, respectively,” Kumar said.
Debt fund assets also increased 14.82 per cent year-on-year, rising from ₹17 trillion in November 2024 to ₹19 trillion in November 2025.
In terms of equity fund performance, small-cap funds delivered the strongest returns over five- and ten-year periods, recording CAGRs of 24.91 per cent and 16.70 per cent, respectively, as of November 30.
Systematic Investment Plans have emerged as one of the most powerful and reliable growth drivers for the Indian mutual fund industry. By November 2025, SIP AUM had reached ₹16.53 trillion, accounting for more than 20 per cent of the industry’s total AUM, underscoring their critical role in long-term wealth creation.
“The expanding middle class and rising financial literacy are encouraging more individuals to adopt structured financial planning and channel savings through the SIP route,” Kumar added.
(IANS)
