India’s mutual fund industry achieved a major milestone in October 2025, as equity assets under custody (AUC) crossed Rs 50 lakh crore for the first time. The AUC stood at Rs 50.83 lakh crore, marking a record high and a sharp 30 percent rise from the February low of Rs 39.21 lakh crore. Mutual funds’ share in overall equity ownership by value also climbed to an all-time high of 10.8 percent.
Industry experts attribute this surge to rising retail participation and sustained optimism in the equity markets. Vinayak Magotra, Product Head and Founding Team Member at Centricity WealthTech, said the robust equity performance attracted retail investors seeking higher returns. He noted that greater financial awareness, amplified through social media and the growth of digital investing platforms, has made equity investing more accessible than ever.
Experts said one of the clearest indicators of this trend is the steady rise in Systematic Investment Plan (SIP) inflows. From around Rs 8,500 crore per month in March 2020, SIP contributions have surged nearly 3.5 times to Rs 29,361 crore by September 2025. This growth underscores the increasing confidence and consistency among retail investors.
Despite muted one-year market returns, investor sentiment remains resilient. Strong monetary and fiscal support — including interest rate cuts, a 100 basis points CRR reduction, and a major GST cut — have reinforced the macroeconomic environment, encouraging continued inflows into equity mutual funds.
Pankaj Shrestha, Head of Investment Advisory Division at PL Capital, observed that equity mutual fund schemes have recorded net inflows for 55 consecutive months, signaling a structural shift in household savings toward financial assets.
Shrestha said disciplined SIP investments, even during market corrections, reflect rising investor maturity. With growing financial literacy, India’s robust economic outlook, and attractive long-term return prospects, the momentum in equity mutual fund investments is expected to persist.
Experts, however, caution that sustained market stagnation or negative trends over the next one to two years could lead to a moderation in inflows. Nonetheless, such a scenario appears unlikely in the current environment of market optimism. Meanwhile, rising interest in passive, index, and hybrid funds is providing investors with more diversified and stable opportunities, further broadening the base of mutual fund participation.
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