Rating agency Crisil on December 17 announced the mutual fund industry will post a double-digit increase for the next few years and its assets under administration will cross Rs 50 lakh crore by 2025. Crisil's research wing said the development in inflows is bound to be fuelled by investments into equities as toward other asset classes.
Investor interest in the mutual fund's section has been developing lately because of market volatility, and the average assets under management stood at about Rs 30 lakh crore as of November 2020.
"Over the five years through 2025, we anticipate the industry's assets under management to maintain its double-digit growth and cross the Rs 50 lakh crore target," Crisil's Managing Director and Chief Executive Officer Ashu Suyash stated.
She said equities, whose share reaches 42 percent at present, will make the increase over the next five years and contribute 47 percent of the AUM by 2025. The rise in the pie for equities is in line with global experiences, she added.
India's favorable demographics, improved financialisation of savings, inflation-targeting management, and rising per-capita income will be the primary growth drivers to pull issues into the segment, Suyash noted. In the last 20 years, the AUMs of the business has grown at a combined maturity rate of 18.5 percent per annum, Crisil said, adding that they stood at Rs 1.4 lakh crore as o 2003.
Meanwhile, addressing at the launch of the report, business lobby Amfi's chairman and chief executive of Kotal Mutual Fund Nilesh Shah said there requires to be a relook at the level of enlightenment with which the industry works.