India’s Mutual Fund AUM to cross Rs 300 lakh cr; Direct Equity Rs 250 lakh cr by 2035: Report

The retail investing landscape in India is heading into expansion with mutual fund assets projected to cross Rs 300 lakh crore and direct equity holdings expected to touch Rs 250 lakh crore by 2035, according to the How India Invests 2025 report released by Bain & Company in partnership with Groww.

The report states that household wealth reached Rs 1,300–1,400 lakh crore in FY25, growing nearly 13% over five years.

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Mutual funds and direct equities have emerged as the fastest-growing asset classes, outpacing bank deposits as financial literacy rises and digital-first platforms expand access.

Despite this momentum, India’s allocation to mutual funds and equities remains low at 15–20% of household investable assets, compared with 50–60% in the US and Canada.

Individual mutual fund AUM touched Rs 41 lakh crore by FY25, supported by a doubling of household penetration from 5–6% to 10–11% over the past five years.

SIP-led investing continues to dominate, particularly among salaried investors, even as lump-sum investments gain traction.

The report projects that India’s mutual fund AUM could exceed Rs 300 lakh crore by 2035, driven by wider digital adoption, regulatory support, and expanding participation from beyond the top 30 cities.

Direct equity holdings by individuals also rose to Rs 42 lakh crore in FY25, propelled by a fivefold increase in dematerialised accounts since FY20.

New-age discount brokers and a younger investor base, nearly 40% below the age of 30 have driven a shift toward market participation, although per capita investment has dipped as more first-time, lower-ticket investors enter the market.

Equity AUM is expected to reach Rs 250 lakh crore by FY35, the report said.

Digital platforms now account for 80% of direct equity investors and 35% of mutual fund investors.

The report identifies seven emerging investor archetypes across age, occupation, and city tiers, noting a consistent movement from speculative trading to long-term investing.

Salaried millennials show the highest mutual fund allocation, while business owners display greater equity exposure and trading velocity.

Retail participation, the report argues, is bolstering India’s economic resilience by deepening capital markets, improving financial inclusion, and contributing to job creation across distribution and advisory networks.

With continued reforms and rising awareness, retail investment flows are positioned as a key enabler for India’s long-term goal of becoming a $30 trillion economy by 2047.