India's mutual fund sector is witnessing a new wave of equity participation. So far during this financial year (April-July), industry has added nearly 3 million equity folios, at an average of 750,000 a month.
This is the highest pace of account additions since 2007-08. During 2007-08, just ahead of the financial crisis, the industry added an average million equity accounts a month.
If the current pace of account additions in the equity segment continues unabated, the current financial year may end up adding nine million equity folios, taking the overall equity accounts to a massive 50 million.
The steep rise in account additions comes at a time when Indian share indices have been hovering at historical highs.
In the previous financial year 2016-17, when the sector had added 4.8 million equity accounts.
Ever since the Narendra Modi-led government took charge in 2014, there has been a continuous rise in equity investors' base. Against below 30 million in March, 2014, it currently stands at 43.8 million.
The overall equity assets have already surged from below Rs 2 lakh crore to about Rs 7 lakh crore. Incremental inflows over the last three years have been in excess of Rs 2 lakh crore.
Sector officials feel that investors will keep flocking to equity mutual funds
as long as other investment avenues do not look attractive.