Mutual fund is now Rs. 48 lakh crore industry

Here is what it means for future expectations from mutual funds.

Author

Tejas Lakhani
October 17, 2023 • Estimated Reading Time: 3 minutes

The Indian mutual fund industry continues to experience remarkable growth in September 2023.

While the MF industry AUM has reached close to Rs.48 lakh crore, the gross monthly SIP inflows are now over Rs.16,000 crore in September 2023, according to AMFI data.

Key numbers:

  • AUM of retail investors accounts for 52% of the total industry assets. It has reached Rs.25.50 lakh crore

  • Industry has added 12 lakh new SIP accounts. Total SIP account is now 7.12 crore

  • Total folio count is 15.70 crore with 12.54 crore retail folios

  • Unique investor count is over 4 crore now

NS Venkatesh, CEO, AMFI, said, “The Mutual Fund industry crossing the 4 crore unique investors mark is a testament to Indian retail investors’ participation in equity markets through the mutual fund route. This is further demonstrated by the SIP contribution in September 2023 which is the highest till date and the stellar growth of 21% in overall AUM. The mutual fund industry in India maintains a positive overall outlook, supported by its commitment to investor education and safeguarding investor interests. This dedication has strengthened confidence within the investor community.”

Why inflows are so strong?

  • Inflation dropped to 6.8% YoY in August’23 vs 7.4% in July’23.

  • India’s PMI (Purchasing Manager’s Index) growth eased to 57.5 in September’23 vs 58.6 in August’23, however, still strong.

  • Industrial Production growth in July’23 stood at 5.7% vs 3.7% in June’23.

  • GST collection rose 10.2% YoY to 1.63 lakh cr in September’23.

  • GST collections have been more than INR 1.6 lakh cr for the 7th time since the inception of GST.

  • INR was stable and closed at ~83.2.

  • Globally crude oil prices have also moved up sharply, hovering around USD ~92/bbl in September’23, however, cheaper Russian imports are helpful.

Now, what does it mean?

  • India’s economy is strong and the depth of Indian investors has increased significantly.

  • There is a global risk from geo-political events such as the Israel-Hamas war etc., and Russia-Ukraine.

  • US’ interest rates are near 5% and hence may create pressure on other economies relying on debt.

  • However, because of India’s domestic investors, we may not see a significant price correction (10-20%). We are more likely to see time correction.

  • Indians are sitting with approximately Rs. 3 lakh crores to deploy in the market if there would be any correction.

Most of the mutual fund investors have become consistent with SIP. Our aim is to help 1,000 people to build Rs. 5 crores in financial corpus.

  • Rs. 1 lakh monthly investment turns into Rs. 2.75 crores

  • Rs. 2 lakhs monthly investment turn into Rs. 5.55 crores

  • Rs. 5 lakhs monthly investment turns into Rs. 14.01 crores

All this in 10 years.

Thank you for trusting us and we look forward to being with you in building this wealth. Simply reply to this email to connect.

Have a great week ahead!

Thanks
Tejas Lakhani
Chartered Accountant
Finance Professional (Ex-PwC, Ex-ACC)