MFs ownership in NSE-listed cos hit record high of 10%

Individual investors direct ownership dipped to 9.5 per cent in the listed universe suggesting a growing popularity of mutual fund as a preferred vehicle for equity investment by retail investors

Backed by the steady rise in inflows, the ownership of mutual funds in listed companies scaled a record high of 10 per cent in FY25 and marked the first double-digit reading.

In March quarter alone, MFs infused ₹1.9 lakh crore into equities, contributing to a record annual net inflow of ₹6.1 lakh crore. Passive funds within MFs also reached a peak share of 2 per cent.

Individuals’ holding, directly and through mutual funds, remained steady at a record high of 18 per cent of the market with a current holding of ₹74.5 lakh crore, a compounded annual growth rate of 17 per cent over five years, according to NSE Market Pulse report released on Thursday.

However, individual investors direct ownership dipped to 9.5 per cent in the listed universe suggesting a growing popularity of mutual fund as a preferred vehicle for equity investment by retail investors.

Akshat Garg, AVP, Choice Wealth said individual investors are increasingly channelling incremental money into MFs and the shift has been structural, not cyclical. The post-pandemic environment has made financial planning mainstream, with MFs emerging as the most accessible and transparent vehicle for disciplined wealth creation.

The surge in SIP flows, especially from tier-II and -III cities, reflects growing investor maturity, but at the same time, direct equity investing has become more volatile and time-consuming, prompting retail investors to delegate that complexity to fund managers, he added.

Moreover, thanks to the sustained inflows through Systematic Investment Plan, the share of investment in actively managed schemes were at 8 per cent while that of passive funds were two per cent.

Strong performance of Indian equities, coupled with rising participation, has resulted in a significant increase in household wealth over the last few years. “Our estimates suggest that the household wealth in Indian equities increased by over ₹46 lakh crore in the last five fiscal years,” said the report.

Notably, the combined direct and indirect participation of individual investors surpassed FPI ownership for the first time since 2006 in FY25, underscoring the rising prominence of individual investors in India’s equity markets, said the report.

Since June 2021, with a strong resurgence in SIP-led inflows, MF ownership in NSE-listed companies has climbed steadily, reaching all-time highs.

In contrast, the share of Banks, Financial Institutions and Insurance companies has been on a declining trend since 2012, aside from a notable one-time increase in FY23, followed by a subsequent correction.

Household wealth in Indian equities — through both direct holdings and mutual funds — has risen by over ₹46 lakh crore between FY21 and FY25, with more than ₹25 lakh crore added in just the last two years, said the report.

Published on May 29, 2025