In FY24, India’s mutual fund assets hit a record high of ₹53.40 lakh crore, up 35% from the previous year, mainly due to increased retail investor participation and a strong stock market. The number of investors also reached a record high of 17.78 crore, with women constituting 23%.
Systematic investment plans (SIPs) gained popularity, with monthly inflows hitting ₹19,300 crore in March 2024. Equity funds saw a significant growth of 55%, while debt funds grew moderately by 7%. Flexi cap and large-cap funds were popular within equity, and hybrid funds exceeded ₹7 lakh crore in assets. ETFs also saw substantial growth, reaching ₹6.64 lakh crore in assets.
Binance, the world’s largest cryptocurrency exchange, is set to return to India after paying a $2 million penalty. It will register with India’s Financial Intelligence Unit (FIU) and comply with all relevant laws, including anti-money laundering regulations and virtual digital assets taxation.
Binance’s ban earlier was due to non-compliance with FIU and PMLA guidelines. Its return may impact the market significantly, given its dominance and superior technology. Binance aims to provide localized payment solutions, establish an India team, and invest in the country’s blockchain system.
In March 2024, cumulative flows into passive funds hit a 33-month low at ₹49,846 crore, down from ₹1,55,197 crore a year ago. Reasons include better returns from active large-cap funds and changes in debt fund taxation affecting index fund yields.
Additionally, profit booking and changes in EPFO equity allocations impacted ETF flows. The share of passive fund inflows to active funds dropped to 27% from 79% in the last year. Passive fund AUM totaled ₹8.77 lakh crore, 34% of total equity fund AUM, with passive AUM growing 34% year-on-year, compared to 54% growth for active funds.
