The Indian mutual fund (MF) industry witnessed an addition of around 2.2 million new investors during 2014-15. The total number of investors stood at 4.17 crore at the end of the 12-month period in March 2015 as compared to 3.95 crore at the end of March 2014 registering a growth of 5.54 per cent. The growth in the number of investors in the Rs 12 trillion (US$ 187.17 billion) sector is largely concentrated around the top five asset management companies (AMCs) – HDFC Mutual Fund, ICICI Prudential, Birla Sun Life, Reliance MF and UTI MF.
With close to a total of 44 fund houses in the country, the top five companies account for close to 80 per cent of the sector's assets under management (AUM). ICICI Prudential registered the fastest growth of 25 per cent with the total investor base at 33.59 lakh followed by Birla Sun Life with growth of 20 per cent to 24.26 lakh from 20.19 lakh investors. HDFC MF, the country's largest fund house with an AUM of Rs 1.61 trillion (US$ 2.5 billion), saw growth of 15 per cent in its customer base to 52.1 lakh, adding a little more than 7 lakh new investors.
According to another recent report, Reliance MF led the growth of retail equity AUM at 119 per cent during the previous fiscal, followed by ICICI Prudential at 76 per cent and Birla Sun Life at 72 per cent. HDFC MF grew its retail equity AUM by 45 per cent and UTI by 39 per cent during the period.
The large growth witnessed during the previous fiscal signal towards the upbeat domestic investor sentiment in the country. On the other hand, with the large investor base concentrating with the top five companies, it is evident that Indian consumers are only willing to take market risks with companies that have a strong brand equity and a positive past track record.
The asset base of the mutual fund industry in the country is expected to grow faster at 18.6 percent per annum to cross Rs 20 trillion(US$ 325 billion) by 2018 with an investor base of 10 crore accounts. With the total investor base still at a low level of 2 per cent out of the total domestic population, there are ample growth opportunities available in the domestic mutual fund industry.