According to the Association of Mutual Funds in India (AMFI), the assets under management (AUM) of the mutual fund industry grew by 22.5% to ₹72 trillion in May 2025. This growth was recorded despite a subdued second half of FY25, leading to a record number of Systematic Investment Plan (SIP) closures.
As the market corrected, capital market stocks also came under pressure—but that’s now beginning to change. The broader market has regained ground despite persistent global macroeconomic concerns. This has led to a sharp rebound in capital market stocks, including asset management companies (AMCs). And if market momentum holds, these companies could emerge as key beneficiaries of the rally.
Here’s a look at three leading AMCs that appear well-positioned to ride the upcycle.
#1 HDFC Asset Management Company
HDFC AMC is a subsidiary of HDFC Bank, which holds a 52.5% stake in the company. The company offers mutual funds (active and passive), options such as AIFs and PMS, and also provides international trading through GIFT City.
With a closing AUM of ₹7.5 trillion in FY25 (up 24% year-on-year), it is India’s second-largest AMC. Of the total AUM, 40.9% comes from direct channels, 26.5% through mutual fund distributors (MFDs), 21.9% from national distributors, and 10.7% from banks. The rest comes from HDFC Bank itself, contributing 5.8%.
The company is the number 2 player in the B-30 market, holding an 11.9% share. It receives 80.9% of MAAUM from the Top 30 cities, with the remaining contribution coming from B-30 locations. MAAUM means monthly average AUM. B-30 market refers to mutual fund investments originating from locations beyond the top 30 cities.
It serves 98% of PIN codes across India through 280 offices and over 95,000 delivery partners. The company has 13.2 million unique investors, with a total of 23.3 million active accounts.
Equity AUM and retail flows lead growth
Equity-oriented AUM comprises 66.8% (₹4.7 trillion) of total AUM, ahead of the industry’s 58.1%. HDFC AMC holds a 12.9% market share in equity-oriented schemes.
The remaining 20.7% (₹1.6 trillion) is from debt AUM, while Liquid AUM contributes ₹0.6 trillion or 7.9%.
Notably, despite the weak equity market (towards the end of the year), equity AUM grew 25% to ₹4.7 trillion in FY25. Debt AUM grew 16% to ₹1.6 trillion, and liquid AUM grew 10% to ₹0.6 trillion.
The growth in equity AUM was driven by retail investors who prefer equity-oriented schemes. The number of active individual accounts grew by 42% to 23.2 million in FY25. This led to a 20% increase in individual monthly AUM to ₹4.4 trillion, representing 70.8% of total AUM.
The company also holds a 13.2% share in individual AUM—the second-highest in the industry. It also added 13.2 million unique investors, accounting for 24% of the 54 million mutual fund industry. HDFC AMC has a strong foothold in SIPs, with ₹36.5 billion in monthly SIP transactions. SIP AUM stands at ₹1.7 trillion.
Strong financial performance
From a financial perspective, revenue from operations increased 35% YoY to ₹34.9 billion, while operating profit from core AUM rose 43% to ₹27.3 billion. At the same time, total income surged 28% to ₹40.6 billion, with net profit increasing 26% to ₹24.6 billion.
Its operating margin in FY25 stood at 36 basis points (0.36%). Return on equity also increased by 3.9 percentage points to 32.4%. From a valuation perspective, it trades at a price-to-equity multiple of 44x, which is in line with its 7-year median of 41x.
#2 Nippon Asset Management
Nippon Asset Management is India’s fourth-largest AMC based on Quarterly Average Assets Under Management (QAAUM). The company offers mutual funds, AIFs, PMS, and offshore diversified mutual fund offerings across both active and passive segments.
It is the leader among non-bank-sponsored mutual funds in India. With an AUM of ₹5.6 trillion, it holds an 8.3% market share in the mutual fund industry and an 8.6% share in the equity segment.
The AUM is spread across various asset classes, with equities accounting for 50% of the total AUM, while exchange-traded funds (ETFs) make up 28%. Debt mutual funds contribute 15%, and liquid funds form the remaining 8%. The share of ETFs has increased from 25.9% in FY24, indicating a growing preference for passive investing.
The company has a broader reach in the B-30 Average AUM (AAUM) sector, with a 20% market share compared to the industry’s 18.2%. It also has the largest investor base in the industry, with 20.8 million unique investors as of March 2025.
Passive investing gains traction, ETF share rises
The direct channel accounts for 56% of the overall distribution mix, while distributed assets comprise the remaining 44%. Its average SIP book stood at ₹90.5 billion, a significant rise from ₹52.7 billion last year. Notably, 54% of its SIP accounts continue for over five years, well above the industry average of 30%.
In the ETF segment, the company is a clear leader, holding a 53% market share in terms of volume, a 53% share in terms of folios, and a 19% market share in terms of value.
Coming to its financial performance, revenue increased 36% YoY to ₹22.3 billion, while net profit rose 16% to ₹12.9 billion. Equity yield stood at 57 bps, though management expects a 2–3 bps dip YoY going forward.
Retail focus drives SIP growth and offshore expansion
Looking ahead, Nippon AMC plans to maintain focus on the retail and HNI customer segments, which management sees as the largest opportunity areas. In equity schemes, the company expects over 90% of future business to come from retail and HNI investors.
The company has also launched a new scheme in Japan, providing Japanese investors with access to the Indian market. Nippon is expected to be a key beneficiary of this initiative. Management expects inflows from Japanese retail investors through this channel. Positively, yields on offshore schemes are in the range of 60–100 bps.
It trades at a P/E ratio of 40x, which is well above its 7-year median of 29x.
#3 Aditya Birla Sun Life AMC
Aditya Birla Sun Life is promoted by Aditya Birla Capital and Sun Life (India) AMC Investments. The company’s product suite includes mutual funds, PMS, AIFs, offshore, and real estate offerings. It is one of India’s leading asset managers with an AUM of ₹4.0 trillion.
The company has a pan-India distribution network spanning over 90 banks, 330 national distributors, and over 89,000 MFDs. It serves over 19,000 pin codes and 300+ locations, with over 80% located in B-30 cities.
Fixed income and institutional AUM lead growth
As of Q4FY25, its mutual fund QAAUM rose 15% YoY to ₹38.2 billion. Of this, equity QAAUM contributes 44%, to totalling ₹16.9 billion. The remaining 56% (₹21.3 billion) came from fixed income (including ETFs),. Passive AUM stood at ₹347 billion.
In addition, 48% (₹18.5 billion) of the MAAUM comes from individual AUM. However, the company recorded just 6% YoY growth in this segment, slow than peers like HDFC AMC and Nippon.. On the other hand, institutional MAAUM, accounting for 52% of MAAUM, recorded a 23% growth to ₹19.4 billion.
Retail flows lag, rural strategy gains priority
The company generates just ₹6.5 billion of MAAUM from B-30 cities. This remains a large opportunity area in the coming years as reach expands and penetration improves. SIP flows remained muted at ₹13.2 billion, with just 5% YoY growth. The number of live SIPs grew 18% to 4.2 million.
The company’s revenue increased 25% YoY to ₹16.8 billion, while net profit rose 19% to ₹9.3 billion. Looking ahead, the company plans to tap into potential rural and emerging markets for early-stage growth. It is also focusing on enabling new MFDs to scale their business efficiently.
It trades at a P/E ratio of 25x, which is well above its 3-year median of 20x.
Conclusion
According to a joint report by AMFI and Crisil Intelligence, mutual fund penetration (MF AUM-to-GDP) in India reached an all-time high of 19.9% as of March 2025. This is lower compared to other developed countries, such as the United States, where over half of the population invests in mutual funds.
The Indian mutual fund industry is poised to benefit from the growing financialization of savings, driven by the young Indian demographic and rising financial literacy. Now, more people are investing in mutual funds than before, while fewer are investing in fixed deposits and savings accounts.
This is expected to increase gradually as the Indian economy matures and employment levels rise, benefiting the equity market and, in turn, mutual funds. All three companies discussed above are among the leading companies backed by strong parentage. They could be among the big beneficiaries of the structural tailwinds.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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