Trade Analytics
Financial Services
Investment corpus in India's pension sector could cross US$ 1 trillion by 2025.

Indian Financial Services Industry Analysis

Latest update: April, 2018

  • The asset management industry in India is among the fastest growing in the world. As of November 2017, 42 asset management companies were operating in the country
  • At the end of March 2018, the assets under management of the mutual fund industry stood at Rs 21.36 lakh crore (US$ 331.42 billion).
  • India registered a record inflow of amount of US$ 51.02 billion in mutual funds in FY 2016-17. According to the Association of Mutual Funds in India (AMFI) data, this was the highest investment in mutual fund schemes since the fiscal 1999-2000.
  • The number of mutual fund (MF) portfolios have increased to 66.5 million as of December 2017, backed by rising interest in MFs among investors.
  • Mutual fund (MF) equity portfolios in India reached a 10-year high of 49.3 million, by end of 2017.
Growth

Notes: AUM – Assets Under Management, * - as on the March 31st of every year, * - Exchange rate used is average of 2017-18 i.e. 64.45
Source: AMFI, Aranca Research

  • The number of listed companies on NSE and BSE increased from 6,445 in FY10 to 7,501 in March 2018.
  • The market capitalisation of all the companies listed on the BSE reached a record Rs 150 lakh crore (US$ 2.33 trillion) backed by high gains in the broader market.
  • The amount raised by IPOs in India increased from US$ 318 million in FY 2008-09 to US$ 10,888 million in FY 2017-18*.
  • Initial Public Offers (IPOs) by small and medium enterprises (SMEs) in India received record funding of Rs 16.79 billion (US$ 259.35 million) in 2017 through 133 issues.
  • The total amount of initial public offerings increased to Rs 84,357 crore (US$ 13,089 million) by the end of FY18.
Growth

Notes: FII – Foreign Institutional Investors, NSE – National Stock Exchange, BSE – Bombay Stock Exchange, * - As of March 2018, ^ - as per a study by rating agency ICRA, # - as of January 2018
Source: SEBI, ^ - as per a report by EY

Last Updated: April, 2018

The country’s financial services sector consists of the capital markets, insurance sector and non-banking financial companies (NBFCs). India’s gross domestic savings (GDS) as a percentage of Gross Domestic Product (GDP) has remained above 30 per cent since 2004. It is projected that national savings in India will reach US$ 1,272 billion by 2019. Over 95 per cent of household savings in India are invested in bank deposits and only 5 per cent in other financial asset classes.

The asset management industry in India is among the fastest growing in the world. Corporate investors accounted for around 43.03 per cent of total AUM in India, while High Net Worth Individuals (HNWI) and retail investors account for 29.65 per cent and 25.25 per cent, respectively. In the Asia-Pacific, India is among the top five countries in terms of HNWIs.

RBI has allowed 100 per cent foreign investment under the automatic route in ‘other financial services’.

The Government of India has launched the 'Bharat 22' exchange traded fund (ETF), which will be managed by ICICI Prudential Mutual Fund, and is looking to raise Rs 8,000 crore (US$ 1.22 billion) initially.

The Securities and Exchange Board of India (SEBI) has allowed exchanges in India to operate in equity and commodity segments simultaneously, starting from October 2018.

India’s equity market turnover has increased significantly in recent years. The annual turnover value in the National Stock Exchange (NSE) witnessed a CAGR of 19.13 per cent between FY 96 and FY 17 to reach US$ 790 billion. During the month of January 2018, equity mutual funds have registered a record net inflow of Rs 14,683 crore (US$ 2.27 billion).

In April 2018, the Government of India issued minimum FDI capital requirement of US$ 20 million for unregistered /exempt financial entities engaged in ‘fund based activities’ and threshold of US$ 2 million for unregistered financial entities engaged in ‘non-fund based activities’.

The Government of India has taken various steps to deepen the reforms in the capital markets, including simplification of the Initial Public Offer (IPO) process which allows qualified foreign investors (QFIs) to access the Indian bond markets. In FY18 the total amount of Initial Public Offerings increased to Rs 84,357 crore (US$ 13,089 million).

Sectoral Presentation (April, 2018)

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Previous Sectoral Presentation (March, 2018)

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