A recent report by Icra Analytics highlights the significant
contribution of five states—Maharashtra, New Delhi, Karnataka, Gujarat, and
West Bengal—to India mutual fund industry. These states collectively account
for nearly 70% of the industries Assets Under Management (AUM) as of January 2024,
indicating substantial growth and concentration in specific regions.
Contribution to Mutual Fund AUM:
As of January 2024, Maharashtra led the pack with an AUM of
Rs 21.69 lakh crore, followed by New Delhi (Rs 4.52 lakh crore), Karnataka (Rs
3.65 lakh crore), Gujarat (Rs 3.61 lakh crore), and West Bengal (Rs 2.74 lakh
crore). Together, these states contributed 68.5% to the industries total AUM of
Rs 52.89 lakh crore.
Year-on-Year Growth:
These top states witnessed impressive year-on-year growth in
AUM, ranging from 27% to 30%. Despite a marginal decrease in their collective
contribution from the previous year, these regions continue to be the primary
drivers of mutual fund investments in India.
Expansion Beyond Top
States:
While the top five states dominate, Tamil Nadu, Uttar
Pradesh, Rajasthan, Madhya Pradesh, and Telangana also play significant roles
in the mutual fund landscape, contributing substantially to the industries AUM.
Emerging Trends in
Smaller Regions:
The report highlights a steady increase in mutual fund
investments from smaller towns and cities, showcasing growing awareness and
interest among retail investors. Factors such as SIP inflows, expanding AMC
branches, and retail investors’ preference for equities via mutual funds
contribute to this trend.
Regional Disparities
and Per Capita Penetration:
The per capita penetration of mutual funds varies widely
across states, with Maharashtra exhibiting the highest penetration at Rs
1,69,300 per capita, while Manipur shows the lowest at Rs 3,270. This disparity
underscores the need for targeted initiatives to enhance financial literacy and
promote mutual fund investments in underserved regions.
Implications for
Industry and Investors:
The concentration of mutual fund assets in select states
reflects regional economic dynamics, investor preferences, and market maturity.
For investors, understanding these regional trends can guide investment
decisions and highlight opportunities in diverse market segments. Industry
stakeholders can leverage these insights to tailor offerings and expand reach
into untapped markets, contributing to overall market growth and inclusivity.
The dominance of five states in India mutual fund industry
underscores the evolving landscape of financial markets and investor behavior.
While established regions continue to drive significant AUM, emerging trends in
smaller towns signify a broader market penetration and investment culture. Balancing
regional disparities and fostering financial inclusivity will be crucial for
sustained growth and accessibility in mutual fund investments across India.
Last modified: May 9, 2024
