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India's Investment Boom: Mutual Funds to Hit ₹300 Lakh Crore
9 Dec
Summary
- Mutual fund AUM projected to exceed Rs 300 lakh crore by 2035.
- Household mutual fund penetration to double from 10% to 20% in a decade.
- Growth driven by mass, mass-affluent households beyond top 30 cities.
India's financial landscape is undergoing a profound transformation, with mutual fund Assets Under Management (AUM) projected to reach Rs 300 lakh crore by 2035. Direct equity holdings are also expected to soar, indicating a significant rise in market-linked investments. This growth is propelled by increasing household adoption, enhanced digital accessibility, supportive regulations, and a deepening trust in investment vehicles.
The next phase of growth is anticipated to originate from households in tier-2 and tier-3 cities, moving beyond the traditional top 30 urban centers. Mutual fund penetration is set to double to 20% within the next decade. This expansion is further bolstered by a notable increase in long-term investment horizons, with holdings exceeding five years doubling their share in the total AUM.
This evolution signifies a fundamental shift from a savings-centric mindset to an investment-oriented approach among Indian households. Younger investors, particularly Gen Z and millennials, are increasingly embracing market-linked products, driven by digital platforms and growing financial literacy. This democratizing trend is strengthening India's capital markets and positioning retail investing as a crucial pillar for the nation's economic development.
