Industry body AMFI says total asset base of mutual funds could reach Rs. 20 Lakh Crore in the next 4-5 years from about Rs. 9.85 Lakh Crore currently.
According to AMFI, there is huge scope for expanding the reach of mutual funds and channelising household savings into them.
“Mutual fund industry may see its assets under management (AUM) growing to Rs. 20 lakh crore in the next 4-5 years,” said Association of Mutual Funds in India (AMFI) chairman Sundeep Sikka.
The collective AUM of 45 fund houses stood at about Rs. 8 lakh crore at the end of 2013 and has grown to Rs. 9.85 lakh crore during the first quarter of the current fiscal.
However, the asset base of mutual funds together had touched a record Rs. 10.11 lakh crore in May.
The likely impressive growth in AUM to Rs. 20 lakh crore would be accompanied by an increase in folio numbers, substantial contribution from smaller cities and a higher number of distributors, among others, it said.
Growth in the mutual fund industry has remained sluggish in the past couple of years although the capital markets regulator Sebi has taken several measures to re-energise the sector.
In February, board of Securities and Exchange Board of India (Sebi) cleared the first ever long-term policy for the mutual fund industry, proposing a number of tax benefits and measures for growth of this business.
Besides, Sebi, in 2012, allowed mutual funds to levy additional charges on existing schemes to bear the cost of distribution across locations beyond the top 15 cities in the country.