New Delhi, Dec 9 India’s mutual fund penetration is expected to double from 10 per cent to 20 per cent over the next decade -- marking one of the biggest shifts in the country’s investment habits, a new report said on Tuesday.
This projection comes from the ‘How India Invests 2025’ report released by Bain & Company in partnership with Groww, which says the next phase of growth will be driven by rising participation from smaller cities and a new generation of young investors.
According to the report, India’s mutual fund assets under management are likely to cross Rs 300 lakh crore by 2035, while direct equity holdings may reach Rs 250 lakh crore.
The report highlights that the mutual fund ecosystem is expanding rapidly with more households embracing market-linked investments.
The shift is being supported by digital platforms, favourable regulations, and growing trust among investors who now prefer long-term wealth creation over traditional savings.
The report notes that the majority of new growth will come from mass and mass-affluent households living beyond the top 30 cities.
Many affluent investors from the next 70 cities are also expected to adopt mutual funds more actively.
This expanding participation is reflected in the rise of long-term investing; the share of over-five-year holdings in the industry’s assets has more than doubled in recent years.
Saurabh Trehan, Partner and Head of Bain’s Financial Services practice in India, said Indian families are steadily moving away from a savings-driven mindset to a more investment-led approach.
He added that young and first-time investors -- especially those living outside major metros -- are playing a central role in strengthening the country’s domestic investor base.
SIP inflows and long-term holdings have grown sharply, and these trends are expected to play a key role in financing India's economic growth in the coming years.
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