Mutual Funds Industry Sees 524% Growth in AUM: Rise in SIPs, Demat Accounts and Market Capitalisation Explored

The Indian mutual fund industry has witnessed remarkable growth over the past decade, with its assets under management (AUM) skyrocketing by 524%, reaching a staggering ₹68.08 lakh crore in November 2024, compared to ₹10.9 lakh crore in 2014. This growth is attributed to various factors, including the rise in retail participation, especially in rural and semi-urban areas, and a surge in demat account openings. The AUM increase, combined with the significant expansion of SIP accounts and capital raised from the equity markets, highlights the growing prominence of mutual funds and the Indian capital market in the country’s financial landscape.

Growth of AUM and SIPs in Rural Areas

The last decade has seen a substantial shift in mutual fund investments, particularly in rural and semi-urban regions. These areas now account for 50% of the total SIP accounts in the country, reflecting a broader financial inclusion trend. The increase in AUM for B-30 (Beyond 30 cities) areas has outpaced growth in top cities, further emphasising the decentralisation of mutual fund investments. According to the Association of Mutual Funds in India (AMFI), AUM for mutual fund schemes rose by over ₹17 lakh crore this year alone.

Surge in Demat Accounts and Retail Investors

Alongside mutual fund growth, the number of demat accounts has seen an explosive rise. As of August 2024, over 17.10 crore demat accounts were opened, a 650% jump from 2.3 crore accounts in FY14. On average, about 3 crore new demat accounts have been added annually since 2021. This surge is a reflection of India’s growing investor base, with increasing participation from women. According to SBI Research, one in four new investors is a woman, indicating a shift toward more diversified and inclusive investing.

Record Capital Raised and Market Capitalisation

India’s capital markets have also experienced remarkable growth, with funds mobilised by Indian companies increasing more than tenfold over the past decade. From ₹12,068 crore in FY14 to ₹1.21 lakh crore in FY25 (till October), companies have raised substantial amounts from equity markets. This surge in capital raising is matched by a sixfold increase in NSE market capitalisation, which has now reached ₹441 lakh crore. The average trade size in the equity cash segment has also risen significantly, from ₹19,460 in FY14 to ₹30,742 in FY25, marking a positive shift toward higher-value investments.