In its study on the mutual fund industry, ICRA has observed that the industry is on a rapid growth spurt and estimated that the industry will reach Rs.20 lakh crore AUM this month.
In a note sent to Cafemutual, ICRA said, “The new financial year started on a positive note for the Indian mutual fund (MF) industry as it came within striking distance of the Rs.20 lakh crore milestone and could touch the magic figure in the very next month itself if industry assets grow by another 4%. According to data from AMFI, the AUM of the Indian MF industry grew 9.8% from Rs. 17.54 lakh crore in March 2017 to Rs. 19.26 lakh crore in April 2017.”
Sustained inflows in equity inflows and growing number of SIPs will drive this growth, says the report. Equity funds recorded net inflows of Rs.9500 crore in April, an increase of 15% in a month. Similarly, in April 2017, net inflows through SIP route hit an all-time high of Rs 4,200 crore as investments in SIPs continue to attract retail investors. According to AMFI, the mutual fund industry added about 6.26 lakh SIP accounts every month on an average during FY2017, with an average ticket size of Rs.3,660 per account. The inflows are an indication that Indians are slowly but steadily moving from physical to financial savings.
On B15 cities, in the last 12 months, assets from B15 towns have grown 44% due to investor-friendly initiatives by regulators and IAPs by AMCs, says the report. In April 2017, the B15 assets grew by Rs.98,525 crore and stood at Rs.3.23 lakh crore compared with Rs.2.24 lakh crore in April 2016. Currently, B15 accounts for 16.9% of the total assets of the MF industry; however, the share of direct plans in B15 towns is only 22% against 46% in T15 cities.
