Market Overview

As a result of COVID-19-induced lockdowns, the mutual fund industry's SIP collections fell
by 4% to INR 96,000 crore in FY 2020-2021. This resulted in income uncertainty. Many
investors chose to halt their SIPs as a result of the pandemic. From a peak of Rs 8,641 crore,
the contribution fell for 11 months in a row before breaking through to new highs.
The average assets under management (AAUM) of the Indian Mutual Fund Industry for
February 2022 stood at INR 38,56,140 crore. The industry’s AUM had crossed the milestone
of INR 10 trillion (INR 10 lakh crore) for the first time in May 2014. In around three years,
the AUM increased more than twofold, and in August 2017, it crossed INR 20 trillion (INR
20 lakh crore) for the first time. The AUM size crossed INR 30 trillion (INR 30 lakh crore)
for the first time in November 2020. The industry's AUM was INR 37.56 trillion (INR 37.56
lakh crore) as of February 28, 2022.
The rising digital penetration, smart cities, and increased data speeds also facilitate the drift
of asset shares toward smaller cities and towns. The increased retail contribution through
SIPs shows the level of digital penetration in India.
The total number of accounts (or folios, as per mutual fund parlance) as of February 28,
2022, was 12.61 crore (126.1 million units).

The strong performance of the equity markets and net inflows to equity schemes led to an
increase in the asset size of the mutual fund (MF) industry. For the quarter ended December
31, 2021, the average assets under management (AAUM) of the industry were worth INR
36.17 trillion, registering a growth of nearly 30% over a year.
The value of the assets held by individual investors in mutual funds increased from INR
17.18 lakh crore in February 2021 to INR 21.02 lakh crore in February 2022, an increase of
22.32%. The value of institutional assets increased from INR 15.11 lakh crore in February
2021 to INR 17.54 lakh crore in February 2022, recording an increase of 16.08%.

Owing to the large number of new first-time investors entering the market and the simplicity
of registering SIPs through online fintech portals, the number of SIPs and monthly collections
has increased. However, the average ticket value per SIP has decreased. In December 2021,
the average SIP ticket size fell to INR 2,303 per SIP, down from INR 3,313 in December
2017. Monthly SIP receipts, on the other hand, increased by 77% to INR 11,005 crore in
December 2021, compared to INR 6222 crore in December 2017.

• 1963: Establishment of the Unit Trust of India by the government

• 1964: Launch of the first scheme of UTI-Unit Scheme

• 1987: Entry of public sector fund house. SBI Mutual Fund was the first PSU fund house.

• 1993: Emergence of the private sector fund house. Franklin Templeton (erstwhile Kothari Pioneer)

was the first private sector fund house.

1993-2003: The decade saw many developments. While SEBI took over the regulation of mutual
funds, the industry witnessed several mergers and acquisitions and the establishment of foreign
funds.

• 2009: Removal of entry load

• 2012: A part of the Total Expense Ratio (TER) to be used for investor education. Rajiv Gandhi

Equity Savings Scheme (RGESS) was launched.

• 2013: Securities Transaction Tax (STT) for equity funds was reduced. A direct plan for the mutual

fund schemes was launched.

• 2014: The definition of long-term was changed to 36 months from 12 months for a debt mutual

fund. Section 80C limit exemption was increased to Rs 1.5 lakhs.

2017: Tax benefits of RGESS were discontinued. SEBI recategorized the mutual funds which need to
be implemented by the fund houses.