The mutual fund industry in India has seen a significant shift in investment patterns, with Maharashtra, New Delhi, Karnataka, Gujarat, and West Bengal, along with other top-performing states and Union Territories (UTs), playing a crucial role. A recent report by ICRA Analytics highlighted the evolving dynamics and the emergence of smaller cities in the mutual fund space.
1. Top states and UTs lead, but new entrants making headway
The top four states and a UT- Maharashtra, New Delhi, Karnataka, Gujarat, West Bengal, and New Delhi - collectively held 68.46 per cent of the total Average Assets Under Management (AAUM) of Rs 52.89 lakh crore in January 2024. Despite a marginal dip from 69.43 per cent in January 2023, these regions continue to dominate the mutual fund landscape.
Maharashtra stood out as a frontrunner, with an AAUM of Rs 21.69 lakh crore, marking a substantial 27 per cent YoY growth from Rs 17.14 lakh crore in January 2023. This resulted a significant 41 per cent of the overall industry's average AUM, the report added.
2. Growth in key states and UT
Karnataka, Gujarat, West Bengal and New Delhi have witnessed a growth rate of 30 per cent, contributing to the overall upward trajectory in the industry. The AAUM in these states and UT ranged from Rs 2.74 lakh crore to Rs 4.52 lakh crore.
4. Beyond the top states
Smaller states and UTs, are now becoming investment hotspots. Puducherry, Tripura, Manipur, and Lakshadweep have recorded growth rates ranging from 31 per cent to a staggering 998 per cent.
5. Per Capita
Maharashtra maintained the highest per capita penetration at Rs 1,69,300, accounting for 77 per cent of the GDP. On the other end, Manipur recorded the lowest per capita penetration at Rs 3,270, contributing 3 per cent to the GDP.
6. Branch Expansion and Changing Dynamics
The number of fund house branches reflects the evolving landscape. Maharashtra boasts 246 branches, while Manipur has only one. This shift highlights the changing dynamics and increased investor interest in mutual funds across the country.
The mutual fund industry in India is experiencing a transformative phase, with smaller states and UTs witnessing remarkable growth. As the middle class expands, financial planning through Systematic Investment Plans (SIPs) is gaining traction, paving the way for a more inclusive investment landscape.
