Mutual Fund inflows surged by 125% in 2023; may reach ₹100 lakh crore in a few years: ICRA

The mutual fund industry has witnessed an unprecedented surge, with net inflows skyrocketing by 125% throughout the calendar year 2023, a report by ICRA Analytics reveals.

As of November 2023, the industry recorded a substantial net inflow of ₹25,616 crore, marking a significant ascent from the ₹11,373 crore seen in January of the same year. This phenomenal increase signifies a staggering 93% surge in year-on-year net inflows compared to ₹13,264 crore in November 2022.

Reflecting this exponential growth, the net Assets Under Management (AUM) surged to approximately ₹49.05 lakh crore by November 30, 2023, witnessing a notable rise from ₹39.62 lakh crore registered on January 31, 2023.

Forecasts for the new year anticipate a dynamic landscape for the industry, driven by factors like interest rate fluctuations and sustained global crude oil price stability, observed Ashwini Kumar, Head-Market Data at ICRA Analytics to ET.

Kumar emphasized, "The resilience of the Indian economy, coupled with prudent fiscal and monetary policies, as well as potential RBI interest rate adjustments if inflation remains controlled, will likely stimulate higher inflows into the industry throughout 2024."

SEBI, the capital market regulator, is actively engaging with mutual fund entities to explore methods to make Systematic Investment Plans (SIPs) viable with contributions as low as ₹250 per month.

The industry's SIP landscape has witnessed a surge, recording an all-time high of 7.44 crore accounts in November 2023, up from 7.30 crore in October 2023. Concurrently, SIP AUM surged to ₹9.31 lakh crore in November 2023 from ₹8.60 lakh crore in October 2023.

Experts anticipate that the concept of 'sachetisation', encouraging smaller investments, will promote financial inclusion, bolster equity markets, and lead to increased participation by small retail investors through SIPs, thereby fostering a robust investment culture.

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