By 2030, MF industry will be 1/3rd of banking industry, says Nimesh Shah

By 2030, the Mutual Funds (MF) industry will reach one-third of the banking industry and the industry as a whole will grow to more than Rs 100 trillion in the next ten years, ICICI Prudential Mutual Fund's managing director Nimesh Shah said on Monday. Speaking in a panel discussion at the Business Standard BFSI Insight Summit 2023 in Mumbai, Shah said that digital technology has helped the MF industry grow differently. The reach of MF companies has spread across the country to nearly 200 locations.

"If we see reasonable bank deposits, we will be there. A lot of MF education programmes are happening, and the industry as a whole can grow more than Rs 100 trillion in the next ten years", he added.

At the event, Nilesh Shah, managing director of Kotak Mahindra Asset Management, emphasised the importance of spreading awareness to reach new customers. "We need distributors to take MFs to the hinterland. We also need a level playing field in terms of transparency and disclosures," he said.

A Balasubramanian, Aditya Birla Sun Life MF, stated, "China took 20 years to bring telecom penetration and though India started late, we took only 10 years to reach our target. The same goes for mutual funds, the next five years will bring faster growth."

Touching on the rise in the number of MF subscribers, Navneet Munot, managing director and chief executive officer (CEO) of HDFC MF, stated that penetration has increased over the years, but the industry has only touched the tip of the iceberg. The country has only 40 million unique customers. He added that the "Mutual Funds Sahi Hai Campaign" by AMFI and supported by MFs has also boosted the industry's growth.

"We hit a J curve after a lot of hard work. The sachet moment of SIP will bring new customers," he added.

Radhika Gupta, managing director and chief executive officer of Edelweiss MF, said, "We should give ourselves credit. The industry coming together for the campaign "MF Sahi Hai "deserves a round of applause. The fact that we have this kind of retail SIP book is surprising for many outsiders."

At the event, Swarup Mohanty, chief executive officer of Mirae Mutual Fund Mirae Asset MF, said, "Every industry needs an inflexion point. And for us, that started with demonetisation, when there was a shift from fixed passage to a financial asset. That got catapulted with Covid, and today, when you look at the country, the country is very different because it has reached that very instrumental threshold of $2000 per capita. And that's where people start earning money, and when you earn money, the first instinct is to fulfil your desires which people are going through consumerism but when you invest somewhere hoping to earn money, that process has started."

"It is not a question of India or Bharat. With technology, everything is one. Tomorrow we can reach everyone's mobile within minutes and that is what will change the growth of the industry. Earlier, it used to be a luxury to buy a car but now it is a necessity."