Maharashtra holds 37% of total equity AUM

Along with ‘Vada Pav’, Maharashtrians appetite for equity funds has been increasing. This is evident from the fact that Maharashtra continued to dominate the Indian mutual fund industry in terms of equity AUM. Equity AUM of Maharashtra has increased from Rs.2.02 lakh crore in September 2016 to 3.17 lakh crore in September 2017, a growth of 57% in a year. 

Experts believe that growth in equity AUM of Maharashtra is due to increased participation of millennials through SIP. Also, HNIs and institutional investors have started putting money in balanced advantage funds and arbitrage funds respectively due to attractive returns and tax advantage.

Equity AUM includes equity funds, balanced funds and ETFs that track the indices.

Pune-based Bharat Phatak of Wealth Managers believes Mumbai accounts for 40% of Maharashtra equity AUM. “Mumbai is a very large part of the Indian financial market and around 40% of country’s financial transactions happen through Mumbai. However, other cities such as Pune and Nagpur are gaining traction.”

Amravati-based Mahesh Gattani of Balaji Investments said that many people in small cities have started realizing the potential of equity investments over a long term. Gattani has recently initiated 500 SIPs on behalf of his clients in equity funds in a single day.  The average ticket size of these SIPs is Rs.2,500 per month per folio with a minimum time horizon of five years.

New Delhi and Gujarat followed Maharashtra with equity AUM of Rs.77,000 crore and Rs.65,100 crore respectively.

Ram Barcha of Vikalp Finvest, Rajkot feels that the current market rally has attracted investors in Gujarat. He said, “Bank have been reducing deposits rates. As a result, investors are looking for other investment avenues such as balanced funds.”

Similarly, Karnataka and West Bengal stood at fourth and fifth position respectively in terms of equity AUM.  Kolkata- based Bharat Bagla of Bees Network believes that the acceptance of risky products such as equity has been increasing among people. He said, “People are now ready to invest in equity funds though it carries a high degree of risk. These people have understood the significance of long term investment in equity funds due to the efforts of distributors and fund houses.”

Interestingly, investors in small states and union territories such as Sikkim, Mizoram, Nagaland,  Tripura and Andaman and Nicobar Islands have been increasingly lapping up equity funds. In fact, Nagaland has recorded the highest growth of 990% in equity AUM last fiscal.

Overall, the industry recorded 54% growth in equity AUM. AMFI data shows that industry added around Rs.3 lakh crore to its equity AUM to reach Rs 8.40 lakh crore last fiscal in one year.

State-wise growth in equity AUM

‘Others’ indicates assets from investors whose KYC is incomplete.