The Indian mutual fund industry continues to be dominated by a few large asset management companies (AMCs), with the top players managing most of the industry’s assets, according to the latest AMFI-Crisil Factbook.
The report highlighted that the top five AMCs in India account for around 56 per cent of the total mutual fund (MF) assets, while the top 10 AMCs hold nearly 78 percent. It said “The Indian mutual fund industry remains significantly concentrated among the top AMCs, which collectively manage the majority of the industry’s assets”.
The report also added that a similar pattern is observed in the United States. The top five fund houses in the US also control 56 per cent of the total assets, but the top 10 firms manage about 69 per cent. This indicates that asset concentration among the top players is comparatively higher in India than in the US. However, there has been a shift in trends over the years. In India, the concentration of assets in the top five and top ten AMCs has declined since December 2019, reflecting a more competitive market.
In contrast, the concentration of assets among the top AMCs in the US has increased during the same period. The Indian mutual fund industry has seen a rise in the number of AMCs in recent years, following approvals from the Securities and Exchange Board of India (SEBI). This has encouraged major financial institutions, fintech firms, and international companies to enter the market. The number of AMCs increased from 41 in March 2019 to 45 by December 2024.
A significant development in this direction is the introduction of “MF Lite” regulations in December 2024. These new guidelines aim to reduce entry barriers for AMCs, fostering competition and innovation in the industry.
The move is expected to encourage the launch of more AMCs, leading to a broader range of investment products and better options for investors. As new players enter the market, the mutual fund industry in India is likely to become more diverse and competitive, offering investors more choices while reducing the dominance of a few large firms.
