Page 51 - Banking Finance July 2025

ARTICLE

formed the investment experience, offering seam- flows had surpassed Rs. 25,000 crore, involving over 5
less onboarding (e-KYC, Aadhaar, UPI), portfolio crore investors. Domestic investors, largely through
tracking, and goal-based planning. Registrars and SIPs, have become a stabilizing force in the market.
Transfer Agents (RTAs) provided the essential back-
end infrastructure for scale, efficiency, and trans-
parency, including platforms like MF Central for ser-
vice requests.
o Industry Initiatives: Through multiple campaigns,
perceptions were changed, and SIPs were actively
promoted. Numerous Investor Awareness
Programmes (IAPs) were conducted.
o Regulatory Support: SEBI's actions were pivotal,
including rationalizing scheme categories for bet-
ter understanding, capping TERs to enhance re- Source: AMFI & CRISIL
turns, mandating ESG disclosures, refining hybrid
fund rules, and using incentives to encourage
growth in smaller (B30) cities. Risk management
frameworks and transparency norms were continu-
ously strengthened.

These combined efforts resulted in substantial growth across
metrics - AUM, no of folios (hitting 23.45 crore by March
2025), and SIP inflows (Rs. 25,926 crore during March 2025).
The industry increasingly adopted a philosophy centered on
investor needs.

Drivers of Growth: The Engine of Expan-
sion Source: AMFI & Café Mutual

The impressive expansion of India's asset management sec-
tor is attributable to a confluence of powerful drivers: 4. Digital Revolution: Technology has dramatically low-
ered barriers:
1. Economic Prosperity: Sustained high GDP growth
o Accessibility: Online platforms (from fintechs,
forms the bedrock, increasing disposable incomes and AMCs, distributors) offer unprecedented ease of
the capacity for household savings and investment.
access for investing, tracking, and managing port-
2. Shift to Financial Assets: Households are gradually al- folios. Functionalities such as digital KYC and UPI
locating more savings towards financial instruments payments have simplified procedures. Digital chan-
over physical assets. Mutual funds are capturing an in- nels accounted for nearly 90% of purchase trans-
creasing share of these financial savings, gaining favor actions in FY25.
over traditional investment options, particularly in
o Efficiency: Scalable infrastructure provided by RTAs
search of higher returns.
and platforms like MF Central improve operational
3. The SIP Phenomenon: SIPs have revolutionized partici- efficiency and transparency. The widespread avail-
pation. Their structure promotes discipline, mitigates ability of smart phones and affordable internet fu-
timing risk through cost averaging, and makes market els this digital uptake.
entry accessible via small, regular investments. SIP AUM
and monthly inflows have shown remarkable, consistent 5. Rising Share of Retail Participation: Retail investors
have significantly expanded their presence in the total
growth, demonstrating investor commitment even
AUM landscape, with their allocation climbing from
through market fluctuations. By 2025, monthly SIP in-

46 | 2025 | JULY | BANKING FINANCE