Amfi sees AUM crossing Rs 94 trillion by 2025

MUMBAI: The mutual fund industry is likely to grow by almost fivefold to sniff past Rs 94 trillion by 2025 from the current level of over Rs 20 trillion provided they increase distribution strength and reach.

The industry lobby Amfi has pointed out that to achieve this, the industry needs to increase their distributor strength to over 6 lakh from the present 86,000.

"The AUM of the mutual fund industry is all set to cross Rs 94 trillion by 2025 from Rs 20 trillion at present. Even if the industry grows at a current rate of 23 per cent per annum, it can easily achieve this number," A Balasubramanian, Amfi chairman and Birla SunLife Mutual Fund chief executive said.

In fact, Balasubramanian said the industry has already touched AUM of Rs 20 trillion a few days ago. Even if the industry grow at a 5-year average growth rate, it will easily touch this milestone.

"The industry can reach Rs 94 trillion at a CAGR rate of 23 per cent. I am confident that the industry has the potential to grow at this rate," he said.

On folio counts, he said the industry will have 13.3 crore folios by 2025 up from 5.6 crore now.

He said joint efforts of Sebi, Amfi, fund houses and distributors will drive this growth for the industry.

However, Amfi vice-chairman and Union MF chief executive G Pradeep Kumar said the projected growth of Rs 94 trillion AUM and folio count to 13.3 crore by 2025 will be possible only if the industry increases the number of distributors by almost 10 times to over 6 lakh from 86,000 now.

Earlier addressing the Afmi summit Reliance MF chairman Anil Ambani said due to low penetration, where only one in 25 people have a mutual fund investment now, the total industry volume of Rs 20 trillion is lower than the world's 50 players individual AUM.

The 43-player led domestic MF space still nets almost 85 per cent of their business from the top 15 cities even after 30 years of private players entering the space.