Mutual fund penetration across Indian households is expected to double from 10 per cent to 20 per cent over the next decade.
According to “How India Invests 2025” report, the mutual fund ecosystem continues to deepen and expand, with the next wave of growth driven by increasing household adoption, strong digital enablement, supportive regulation and growing investor trust. Mutual fund penetration across Indian households is expected to double from 10 per cent to 20 per cent over the next decade. The next phase of industry growth will come primarily from mass and mass-affluent households beyond the top 30 cities, said the report released by Bain & Company in partnership with Groww.
Increased adoption among affluent investors across the next 70 cities will further accelerate this expansion. The share of long-term holdings is also rising; over-five-year holdings in industry AUM have doubled from 7 per cent to 16 per cent, and over-five-year SIP holdings have increased from 12 per cent to 21 per cent, reflecting growing investor trust and confidence.
Traditional savings mindset
Saurabh Trehan, Partner & Head of Bain & Company’s Financial Services practice in India said, Indian households are steadily shifting from a traditional savings mindset to a more investment-oriented approach, with mutual funds and direct equities emerging as the fastest-growing asset classes in recent years.
As more households, especially young and first-time investors and those beyond the top 30 cities embrace market-linked products and longer holding periods, there can be a deeper and more resilient domestic investor base, he said.
With SIP inflows and long-term holdings rising sharply, this evolution will be central to how India finances its growth in the years ahead, he said.
Fastest-growing channel
Digital platforms have emerged as the fastest-growing channel for retail investing over the last five years, with about 80 per cent of equity investors and 35 per cent of mutual fund investors being onboarded through these platforms.
Harsh Jain, co-founder and COO, Groww, said the government’s push on digital infrastructure, combined with progressive regulatory measures, has democratised access and fostered deep trust in the ecosystem.
A diverse, resilient investor base is emerging from tier II cities and younger demographics are strengthening India’s capital markets from within, said.
Published on December 9, 2025
