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New Delhi: The 21st century is about to complete its 25 years. If we turn to the stories of the biggest success stories of the Indian economy in the last two and a half decades, then the mutual fund industry will be written in golden letters. The MF sector’s journey from 2000 to 2025 is not just a game of statistics, but it is a testimony to the Indian investors’ investment choices. There was a time when the stock market and mutual funds were considered risky, but today it has become an important part of the financial planning of a majority of the middle-class family.
The latest figures show that the Indian mutual fund industry has set a new record in terms of Asset Under Management (AUM). By November 2025, this figure has reached a record level of Rs 80.80 trillion (approx. Rs 80.80 lakh crore). The jump is exponential as five years ago, in 2020, this figure was around Rs 30 lakh crore.
The speed of growth of mutual funds can be judged by the fact that in the last 25 years the size of the industry has increased manifold. In the year 2000, the total assets (AUM) of the mutual fund industry were Rs 1,03,452 crore. At that time, the market was unilaterally dominated by the Unit Trust of India (UTI), which had 66% (about Rs 68,524 crore) stake in total assets.
At the same time, between 2020 and 2025, that is, in just 5 years, the industry jumped almost threefold. The rise in the market since the Corona period and the way investors have shown confidence is the result of this that today the industry has crossed Rs 80 lakh crore. This shows that the Indian market is now deeper and stronger than ever before.
The biggest reason behind this historic growth is the common Indian investors’ placing their bets on 'Systematic Investment Plan' (SIP). Now investment is no longer limited to big cities. New investors coming from small towns and towns have helped achieve the market scale new peaks. Evidence of this can be seen in the number of investors' accounts or 'folio'.
Commenting on the journey of the Mutual Fund industry since 2000, Nilanjan Dey, director, Wishlist Capital, said It has been “a sea change…Nothing short of a revolution.”
Many more investors have come to the capital markets, many new geographies have been added (see smaller towns), and of course the arrival of new players (AMCs). Financialisation has happened relentlessly -- lots of opportunities have been created by benign government policies, he said.
Dey said that the invention of new products like ETF has also been beneficial and given more opportunities to investors.
Regulatory supervision has changed the state of the asset management industry and the legal framework is very positive now, he said while praising SEBi’s actions.
The expert further said that asset sizes have exploded, and gave the example of Balanced Advantage Funds, which have grown remarkably.
Nuanced products have arrived, for example: Multi Asset allocation funds with gold and silver also attracting investors. Technology has evolved -- now it is easy to invest, redeem, switch -- everything can be done digitally, complex processes are a lot easier to take up, Nilanjan Dey said.
The number of mutual fund folios has increased from 10 crore in May 2021 to 25.86 crore (258.6 million) by November 2025. Equity and hybrid schemes have the highest share in this. This makes it clear that people are now willing to shift away from traditional savings instruments and invest money in equities for a longer period. SIP has turned investment into a habit, bringing a certain amount of money into the market every month and providing stability to the market.
There are many reasons behind this tremendous growth. The main reason is 'financial inclusion'. Now the process of investment has become digital and very easy, so that investors from villages and small towns can also connect easily. The second big reason is the strong performance of equity markets. When investors get good returns, their confidence increases. The Indian investor is now sensible. He is focusing on long-term goals instead of being nervous about market fluctuations.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
