More than 44 lakh equity folios closed in 2012-13, reflecting the eagerness on the part of investors to exit equity investments. The industry lost about 12,200 folios every day in FY13, the highest in the last nine fiscals.

According to latest Sebi data, 2.23 lakh equity folios were closed in March, bringing the total number of folio closures in FY13 to 44.73 lakh. As of March 2013, equity folios accounted for about 77% of the industry?s total of 4.28 crore investor folios.

Over 6 lakh equity folios were closed in December, the highest in FY13. Closures gained pace in September when the market rallied on the back of reform initiatives taken by the government, with September (5.72 lakh), October (4.94 lakh) and November (4.83 lakh) seeing significant numbers. The benchmark BSE Sensex gained about 8% in FY13, crossing the 20,000-mark in January, the first time in nearly two years.

?Those who invested during the peak of 2007 exited during the market upswing between September and December. Still others, who have been worried about short-term calls and who have sensed a lack of directional trend in the market, also chose to exit,? said Deepak Chatterjee, CEO, SBI Mutual Fund. However, he said there was no need for undue concern. ?The industry has to focus on making sure the right kind of products are sold to investors. It is only a matter of time before investors return,? said Chatterjee.

Folio closures have been a regular feature for every single year since FY10. The financial years from FY05 to FY09 saw new folios being created, with FY08 seeing maximum gains, with an average of about 34,000 folios created per day.

Sustained equity folio closures are not the only concern that the mutual fund industry grappled with in FY13. Equity MF schemes saw outflows of R12,931 crore in FY13, including outflows for nine consecutive months from June to February. Significant outflows were seen in September (R3,306 crore), January (R2,501 crore) and August (R2,096 crore).

Equity assets as a percentage of overall mutual fund assets have fallen 6.5% to 24.5% at the end of February this year from 31% in March 2012. The mutual fund industry has been struggling ever since entry loads were done away with in August 2009. Equity schemes have seen inflows in only 14 months after the entry load ban was enforced.