According to Business Standard, Vishal Kapoor, vice-chairman of the Association of Mutual Funds in India (Amfi), revealed that while Maharashtra appears to show strongest mutual fund growth in data, the real picture emerges when examining retail investor numbers and growth pace. Kapoor explained that investments are rising rapidly in beyond the top 30 (B30) cities and towns, with company headquarters in Maharashtra influencing the data as investments are attributed to the state where companies are headquartered. The industry expert emphasized that direct comparison of assets under management (AUM) attributed to states with retail investor numbers would not be appropriate.
As reported by Business Standard, Kapoor identified greater digital access and changing household savings patterns as key drivers for mutual fund expansion. The shift from traditional assets like gold and real estate to financial assets is accelerating, with investors increasingly recognizing benefits of mutual funds. The know your customer (KYC) process can now be completed online, allowing investors to invest with just a few clicks. Regulation has also strengthened investor confidence by providing protection from unregulated schemes and local chit funds, while better performance and easier access have collectively helped accelerate industry expansion.
According to Business Standard, Kapoor characterized the expansion as structural growth with its own momentum, rather than merely market rally-driven. The industry expert noted that while there are around 280 million folios, the number of unique investor households is significantly lower, indicating substantial scope for mutual fund penetration. India remains well behind several developed markets when considering the ratio of AUM to economy size, suggesting substantial scope for expansion in smaller cities and among new investors. This growth is supported by rising investor confidence, greater digital access, regulation, and financial awareness initiatives.
As reported by Business Standard, Kapoor highlighted that the mutual fund industry has been largely English-centric for a long time, limiting penetration when investment products are not explained in simple terms in Hindi and other Indian languages. Technology and artificial intelligence now make it faster and less expensive to provide information in multiple languages, potentially improving financial awareness not only in Hindi-speaking regions but also in smaller markets where regional languages are widely used. The industry believes that financial awareness is the foundation of investment expansion, requiring investors to understand regulated products, risks, and factors influencing investment decisions.
According to Business Standard, Kapoor emphasized that mutual funds' shareholding in Indian equities has overtaken direct retail shareholding, representing a shift in investor behavior toward professional fund management. The industry believes that rising investor confidence, greater digital access, regulation, financial awareness and increasing participation from smaller cities could become key drivers of the next phase of growth. However, he stressed that expansion must be accompanied by continued emphasis on responsible investing and investor awareness, with the industry working through Amfi to broaden investment participation while maintaining fair tax frameworks and responsible financial journalism standards.