India's mutual fund assets top record 57 trillion rupees in April, data shows

Broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai

By Bharath Rajeswaran

BENGALURU (Reuters) - Inflows into India's equity mutual funds moderated in April, while net assets under management (AUM) surpassed 57 trillion rupees for the first time ever during the month.

After taking nearly five decades to build the first 10 trillion rupees of AUM, the mutual fund industry needed only a year for assets to rise from 40 trillion rupees to 50 trillion rupees.

The sector's growth momentum continued, with the last 7 trillion rupees of assets being added in just four months.

Net equity mutual fund inflows fell 16.4% sequentially to 189.17 billion rupees, the lowest since December 2023, data from the Association of Mutual Funds in India (AMFI) showed on Thursday.

Equity mutual fund inflows had seen a similar drop in March, mainly over high valuation concerns, which prompted the markets regulator to flag froth in the segments and put controls in place.

Stress tests by fund houses and mostly in-line March-quarter earnings have brought back investors, said Narendra Solanki, head of fundamental research of investment services at Anand Rathi Shares and Stock Brokers.

Domestic equity mutual funds have seen net inflows every month since February 2021, aggregating to 5.16 trillion rupees, over the same period.

The benchmark NSE Nifty 50 has risen about 56% over these last 38 months, powered by mutual fund inflows.

Investor interest in small-cap funds returned in April, rising to 22.09 billion rupees, after seeing outflows for the first time in 30 months in March.

Mid-caps saw inflows worth 17.93 billion rupees, rising 76.1% from the previous month.

Meanwhile, large-caps saw inflows drop 83% to 3.58 billion rupees, a four-month low.

Aided by the return of mutual fund buying, small- and mid-cap indexes rose 11.4% and 5.8%, respectively, in April, outperforming the benchmark Nifty 50, which rose about 1.25%.

Contributions into systematic investment plans (SIPs) hit a record high of 203.71 billion rupees in April.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sohini Goswami)