AUM-to-GDP ratio in India only 7%: PwC report

74% of current AUM comes from the top fives cities

Though asset base of fund houses crossed the Rs 10-trillion-mark last month, the industry has to tread a long way to catch up with the world when it comes to AUM-to-GDP ratio, says a PwC report.

"The mutual fund penetration in the country is very low compared to global and peer benchmarks. The AUM-to-GDP ratio currently stands at 7% - 8% compared to a global average of 37%," according to a PwC-CII report.

The report also noted that the fund houses badly need to tap the large untapped market as a whopping 74% of the current assets under management (AUM) come from the top five cities, 13% from the next top 10 cities and 6% from the next top 20 cities with the next 75 cities contributing a paltry 3%. There was no change in this break-up since 2009.

However, when it comes AUM break-up by investor class, the share of the corporates rose by two percentage points to 51 in 2014, which was 49 in 2009, followed by FIIs with 21% during the same period, which stood unchanged.

Banks/FIs share was 2% in 2014, down from 5% in 2009; HNIs at 27%, up from 21% in 2009 and retail remaining unchanged at 21% since 2009.

The domestic AUM has grown from Rs 4.7 trillion in March 1993 to Rs 8.25 trillion in March 2014 and over Rs 10 trillion by May 2014, reflecting a CAGR of over 15% over the past 21 years. In the same period, the Sensex grew from 2280.52 points as of March 31, 1993 to 22,386.27 points as of March 31, 2014, clipping at a CAGR of 11.5%, according to the report.

According to PwC, the global aggregate AUMs stood at $64 trillion in 2012, led by the US with $27 trillion and this global AUMs is expected to exceed USS 100 trillion by 2020.