Page 49 - Banking Finance July 2025

ARTICLE

India's Asset

Management

Landscape: The

Path to Financial Ritesh Kumar Binani

Research Officer
Empowerment State Bank Academy
Gurgaon

Gold has been in the spotlight with its record-breaking rally, surpassing the Rs.88,310 per 10 grams
mark for the first time, as geopolitical and economic uncertainties drove investors toward the safe-
haven asset. Meanwhile, silver also reached a new high of Rs.1,01,999 per KG in 2025 reflecting
growing demand and its dual role as both a monetary and industrial metal.

Introduction: 65.74 lakh crore (around USD 780 billion). Over the past ten
years, this represents a growth greater than six times. To-
Projected to become the world's third-largest economy
within the next decade, India has demonstrated robust eco- day, mutual funds represent a significant and growing por-
tion of India's GDP - reaching a record 18.2% in fiscal 2024
nomic expansion, significantly outpacing global averages
- indicating increasing investor acceptance.
with GDP growth over six percent annually since 2012. This
economic vitality has fueled rising incomes and fostered a
strong savings culture, with gross national savings repre- This upward trajectory highlights the vast potential for As-
set Management Companies (AMCs), supported by rising
senting a substantial portion of the national disposable in-
prosperity, enabling regulations, positive economic forecasts,
come, far exceeding rates seen in many developed nations.
and favorable demographics, including a large, young popu-
Despite this high propensity to save, traditional financial lation and an expanding middle class. Furthermore, the reach
avenues have historically captured the lion's share of house- of mutual funds has broadened, with the total number of
hold financial assets. The asset management sector, particu- investor accounts, known as folios, exceeding 23.4 crore by
larly the mutual fund segment, while growing rapidly, March 2025.
started from a relatively small base. Initial estimates placed
the industry AUM around USD 350 billion in March 2018, The Industry's Evolutionary Path: From
part of a broader asset management sphere (including pen- Monopoly to Mainstream
sions and alternatives) valued at roughly USD 550-650 bil-
The journey of India's mutual fund industry, the heart of the
lion then.
asset management sector, stretches back over sixty years.
However, the landscape has transformed dramatically. By Its development can be traced through distinct phases,
March 2025, the Assets Under Management (AUM) of the moving from a monopolistic structure to a vibrant, multi-
Indian mutual fund industry had surged to approximately Rs. player ecosystem.

44 | 2025 | JULY | BANKING FINANCE