India’s Leading BFSI and FinTech Companies 2021

36 The mutual funds industry in India has been maturing over the years, reaching out to a broader base of investors across larger geographical regions. Mutual Funds have gained importance as key components in the equity and corporate bond markets while providing crucial liquidity support to the money market. In this regard, mutual funds are playing a key role in bringing stability to the financial markets through efficient resource mobilization from various sectors. The Assets under Management (AuM) of the Indian mutual fund industry has grown from ` 6.9 tn as on Jan 31, 2011 to ` 30.50 tn by Jan 31, 2021 – a more than four-fold expansion within a span of 10 years. The dramatic growth in resources flowing towards mutual funds in recent times highlights the shift in the pattern of deployment of financial savings in India. The immediate aftermath of the outbreak of COVID-19 led to a dampening in investor sentiment, leading to widespread retreat from credit risk exposures across economies. It also resulted in asset price corrections amidst amplified volatility. Subsequently, increased risk aversion triggered a rush towards liquid cash and safer assets. As of March 2020, there were 46 mutual funds in India, of which 44 were active. Of the active funds, 36 belonged to the private sector. Resource Mobilization through Mutual Funds 0 5000 10000 15000 20000 25000 30000 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 AUM ( ` bn) The Indian mutual fund industry extended its growth momentum in FY20. Assets managed by the mutual fund industry increased marginally from ` 23.8 trillion in FY19 to ` 24.7 trillion by the end of FY20. The marginal change is largely attributed to market corrections in the wake of the outbreak of the COVID-19 pandemic towards the year- end and other unprecedented challenges in its aftermath. 20 25 30 35 Total Assets ( ` trillion) The COVID-19 impact on AUM growth was most prominent duringMarch and April 2020, amidmarket volatility and high degree of redemptions by corporates, particularly in debt funds.While debt-oriented and othermutual funds schemes recorded huge outflows at the peak of the pandemic, equity- oriented schemes bucked the trend, logging good inflows in March 2020; this is largely attributed to retail investors through the systematic investment plan (SIP) route. Mutual Funds Dun & Bradstreet