India’s mutual fund industry could double in four years: What is driving the AUM boom

India’s mutual fund industry could see its assets under management (AUM) double from around ₹65 lakh crore in FY26 to ₹130 lakh crore by FY30, as household savings increasingly move towards market-linked investments, according to Ganesh Mohan, MD, Bajaj Asset Management.

Mohan observed that the shift in household financial savings towards mutual funds and equities is creating a strong runway for industry growth. The share of mutual funds and equities in household financial savings has risen from 8% to 15%, while the share of currency and bank deposits has declined from 48% to 41%.

He highlighted this as a “structural shift”, with mutual funds and equities having “Nearly doubled in share in FY25.”

The industry’s growth is also being reflected in the latest equity-fund numbers. Equity mutual fund assets hit a record ₹48.5 lakh crore in July, accounting for 56% of the industry’s total average assets under management (AAUM), according to the NSE Market Pulse report for August.

“Equity and hybrid AAUM scale fresh highs in July,” the NSE report said.

MUST READ: India’s next megatrend: Why manufacturing is making a comeback as global supply chains shift

Equity funds remain a key growth engine

Equity AUM has risen steadily since moderating in March 2026, with active equity schemes growing 13.3% year-on-year and accounting for nearly 78% of total equity AUM. Active equity schemes alone represented 44% of overall MF AAUM.

Among open-ended equity schemes, flexi-cap funds had the largest share at 15.6%, followed by thematic funds at 14.6%, mid-cap at 13.6% and small-cap at 11.5%. Together, the four categories accounted for more than 55% of equity AUM.

Earnings, investors and SIPs

Mohan said the next leg of industry growth could be supported by 12–15% earnings growth, investor growth of around 15% annually and SIP volume growth of roughly 10–12%.

He further observed that the “Market can shift to 30% + CAGR corridor soon,” pointing to the potential for faster expansion as participation deepens.

India’s mutual fund penetration also leaves room for further growth. MF AUM stood at only about 21% of GDP in CY24, compared with significantly higher levels in several global markets.

ALSO READ: From ₹670 crore to ₹15,000 crore: How Helios Mutual Fund scaled up in under three years

Digital investing is widening participation

Mohan also pointed to the rise of direct investing, noting that 45% of mutual fund investments are now made through direct channels. He described the trend as the “Rise in DIY investing” and said the transition reflects “Savers turning investors.”

However, he stressed that greater accessibility also makes investor behaviour important. Investors have earned around 2.5–5% less than their funds, highlighting the cost of poor timing and other behavioural mistakes.

Mohan stressed that “SIPs and asset allocation remain timeless tools for building long-term wealth”, while advice continues to have an important role as investing becomes increasingly accessible.

DO READ: 88 stocks, 57.9% active share: How Edelweiss Large & Mid Cap Fund is positioning for the next market cycle