Mutual funds storm the 10% citadel, now claim market's third crown

Riding a swell of SIP inflows, they redraw investor playbook

Domestic mutual funds (MFs) have emerged as the third-largest investor group in listed Indian companies. National Stock Exchange’s (NSE’s) latest India Ownership Tracker report shows MFs’ stake in total market capitalisation crossing the 10 per cent mark for the first time in the fourth quarter of 2024-25 (FY25).

 

MFs’ ownership, which stood at 8.9 per cent in March 2024 and 9.9 per cent in December 2024, climbed to a record 10.4 per cent by March 2025. Over the past year, MFs surpassed individual investors and the government to claim the third-largest investor group position.

 

“Aided by sustained systematic investment plan (SIP) inflows, MFs’ share rose further to fresh all-time highs of 12.6 per cent, 10.7 per cent, and 10.4 per cent in Nifty 50, Nifty 500, and NSE-listed companies, respectively. Notably, MFs’ share in the overall listed universe crossed into double digits, surpassing individual investors for the first time ever,” the report said. Average monthly SIP inflows grew 45.2 per cent year-on-year in FY25. 

 

Despite a slowdown in the latter months of FY25, the MF industry recorded unprecedented equity scheme inflows during the year. Inflows into active equity schemes more than doubled to ₹4.2 trillion in FY25 compared to 2023-24.

 

The report also highlighted broader shifts within MF portfolios. “MFs are realigning their portfolios closer to the index. Contrary to foreign portfolio investors, MFs slightly trimmed their overweight stance on largecap financials, tapered their negative bias on consumer staples, and turned incrementally positive on consumer discretionary. The negative stance on commodity sectors, namely energy and materials, was retained, with a slightly less negative view on information technology as uncertainty around global trade dynamics eases,” it added.