Mutual fund assets cross Rs 70 lakh crore as smaller cities drive expansion

India’s mutual fund industry reached a major milestone in October, with assets under custody (AUC) climbing to Rs 70.9 lakh crore, marking a 22 percent rise over the past year. The growth reflects not only buoyant market performance but also strong retail participation from beyond traditional metro hubs.

The pace of expansion has accelerated sharply in the post-pandemic period. It took eight years for AUC to rise from Rs 19.3 lakh crore in 2017 to Rs 39.3 lakh crore in 2023. But over just the past two years, the industry’s asset base is close to doubling at Rs 71 lakh crore.

Retail participation doubles in two years

Investor participation has kept pace with the rise in assets. The number of mutual fund accounts reached 25.2 crore in September 2025, up from 15.7 crore in 2023. By comparison, between 2018 and 2023, folios had taken six years to double—from 8 crore, highlighting the speed of retail inclusion in recent years.

The geography of investing has also changed. The combined share of the top five cities—Mumbai, Delhi, Bengaluru, Kolkata, and Pune—in total assets has fallen from 73 percent in 2016 to 53 percent in 2025, according to industry data. Meanwhile, other cities’ contribution has climbed from just 3 percent to nearly 19 percent, underscoring a deeper penetration into Tier-II and Tier-III markets. Emerging investment hubs

Among rising centres, Hyderabad, Surat, Lucknow, Jaipur, Nagpur, Vadodara, and Bhopal have shown steady gains. Surat’s share increased to 0.77 percent (from 0.55 percent in 2016), Lucknow rose to 0.68 percent (from 0.50 percent) and Jaipur climbed to 0.85 percent (from 0.72 percent). Bhopal (0.35 percent from 0.21 percent), Vadodara (0.86 percent from 0.71 percent) and Nagpur  (0.56 percent from 0.43 percent) also witnessed a rise in share.