The Next Decade Belongs To AMC Industry In India

Summary

India's mutual fund industry is experiencing rapid growth, with assets under management (AUM) increasing 5.5 times in the last decade. Despite being only 20% of GDP, India’s mutual fund market is expected to grow significantly, driven by rising incomes, a young population, and increasing digital adoption. With a rise in systematic investment plans (SIPs) and a growing interest in passive funds, the industry’s outlook is positive. Leading asset management companies like ICICI and HDFC dominate, but regulatory pressures and competition from low-cost ETFs present challenges. The industry is poised to expand, especially in smaller cities, making long-term investing more accessible.

Takeaways

• 😀 India's mutual fund industry has grown significantly, with assets under management (AUM) rising 5.5 times over the last decade.
• 😀 India's mutual fund AUM is currently around 20% of its GDP, far below the US (120%) and the global average (60%).
• 😀 Monthly Systematic Investment Plan (SIP) flows in India have tripled since 2019, reaching over 26,000 crores in May 2025.
• 😀 India’s mutual fund industry is projected to grow at a 19% compound annual growth rate (CAGR) until 2047, with AUM expected to reach 112% of GDP.
• 😀 The number of retail investors in India could grow nearly five-fold from 55 million to 263 million by 2047.
• 😀 Mutual funds in India are categorized into equity funds, debt funds, hybrid funds, liquid funds, passive funds (index funds & ETFs), and sectoral/thematic funds.
• 😀 Sectoral and thematic funds, which focus on specific sectors like technology or healthcare, have grown significantly, making up 43% of total equity AUM in March 2025.
• 😀 The top players in India's mutual fund space include SBI AMC, ICICI AMC, HDFC AMC, Nippon AMC, and Kotak Mahindra AMC.
• 😀 ICICI AMC leads the market with a 13% market share, followed by HDFC AMC (11.5%) and Nippon AMC (8.3%).
• 😀 ICICI AMC has the most extensive range of schemes (118), followed by HDFC AMC (98) and Nippon AMC (97), offering various equity, debt, and passive fund options.
• 😀 The industry's growth outlook remains strong, driven by a young population, rising incomes, and increased digital adoption in smaller cities, although AMCs face challenges from fee pressures and the rise of passive investing.

Q & A

What is the growth rate of India's mutual fund industry over the last decade?

India's mutual fund industry has grown 5.5 times over the last decade, rising from ₹12 lakh crores to ₹67 lakh crores in assets under management (AUM).

What is the projection for India's mutual fund AUM by 2047?

The AMFI PWC study projects India's mutual fund AUM to rise at a 19% compounded annual growth rate (CAGR) until 2047, potentially increasing AUM as a percentage of GDP from 19.9% to 112%.

How are Indian investors changing their investing behavior?

Indian investors are increasingly adopting systematic long-term investing strategies, with monthly Systematic Investment Plan (SIP) flows tripling since financial year 2019, showing a shift towards consistent, long-term contributions even during market volatility.

What are the different types of mutual funds available in India?

The different types of mutual funds in India include: Equity Funds (focused on stocks for long-term capital appreciation), Debt Funds (investing in bonds and fixed income), Hybrid Funds (combining equity and debt), Liquid Funds & Money Market Funds (short-term investments), Index Funds & ETFs (passive investing), and Sectoral & Thematic Funds (focused on specific sectors like technology or healthcare).

What role do Sectoral and Thematic Funds play in India's mutual fund industry?

Sectoral and Thematic Funds have become significant in India's mutual fund industry. By March 2025, these funds, along with flexi-cap and mid-cap funds, accounted for 43% of total equity AUM, reflecting investors' increasing interest in specialized investment strategies.

Which companies are the largest players in India's asset management market?

As of FY 2025, the largest asset management companies in India by AUM are SBI AMC, ICICI AMC, HDFC AMC, Nippon AMC, and Kotak Mahindra AMC.

What is the market share of ICICI AMC in India?

ICICI AMC holds a market share of 13%, making it the largest player in the Indian mutual fund industry.

What are the challenges faced by Asset Management Companies (AMCs) in India?

AMCs in India face challenges such as increasing regulatory pressure on fees and margins, which impacts revenue and profit margins. Additionally, the growing popularity of low-cost passive funds like ETFs and index funds is a significant challenge, particularly among younger investors who favor lower fees.

How has the number of retail investors in India changed, and what is the future outlook?

The number of retail investors in India is expected to expand nearly five-fold, from around 55 million to 263 million investors by 2047, driven by rising incomes, financial literacy, and easier access to investment platforms.

What is the growth rate of AUM for Nippon India AMC from FY 23 to FY 25?

Nippon India AMC had the fastest growth in AUM from FY 23 to FY 25, with a compound annual growth rate (CAGR) of 37.9%, the highest among the top AMCs in India.