As mutual fund AUM hits Rs81 trillion and alternatives surge, Centrum sees industry doubling to $2.3 trillion by 2029
Indian households are abandoning physical assets it seems for financial markets at a pace that would have seemed impossible five years ago. Centrum’s latest research quantifies the shift: household financial assets stood at Rs319 trillion in FY24 and are projected to nearly double to Rs750 trillion by FY30. That’s a 15% compound annual growth rate sustained over six years creating what the report calls “a long-term growth opportunity for India’s financial system and economic aspirations.”
For anyone thinking about where to build wealth, the implications are clear. The infrastructure to invest, the products to choose from, and the professional advice available are all expanding rapidly.
The $1.1 trillion gap that wealth managers are racing to fill
The wealth management industry had $1.1 trillion in assets under management in FY24, but roughly $400 billion “remains self-managed or informally managed, highlighting a significant gap between demand and organized wealth management supply,” says Centrum. Of India’s approximately 320 million households, between 12 and 16 million constitute “the core addressable market for wealth managers,” with combined financial wealth of at least $1.1 trillion. Yet professional wealth management service providers manage only $680 million of it.
Centrum expects total industry AUM to grow at a 15% CAGR to reach $2.3 trillion by FY29, driven by India’s HNI population of 85,698 in 2024, “expected to rise to 93,753 by 2028.” For investors, this means more competition among wealth managers, potentially better service, and certainly more sophisticated products becoming accessible.
Mutual funds are where the real action is
The Indian mutual fund industry is experiencing what Centrum describes as “robust, equity-led expansion.” Total AUM rose 25% year-on-year to Rs67.4 trillion as of March 2025, then continued climbing to Rs81 trillion by end-December. Equity mutual fund AUM “grew 28% YoY to Rs37.7 trillion in Mar’25 and surged to Rs45.8tn by end-Dec’25, reflecting strong investor preference for equities.”
The flow numbers show sustained conviction rather than speculative frenzy. Net inflows totaled Rs8.2 trillion in FY25, “including Rs5.5tn into equity funds,” followed by Rs7.3 trillion during the first nine months of FY26, “of which equity accounted for Rs3.6tn.” As Centrum observes, “This data underscores a clear behavioural shift as investors increasingly use mutual funds for long-term wealth creation.”
The introduction of Specialised Invesment Funds (SIFs) with a minimum investment threshold of Rs10 lakh “is expected to further accelerate AMC growth by deepening participation from affluent investors,” the report notes. From a practical standpoint, Centrum argues that “the expanding equity mutual fund ecosystem offers a scalable, regulated and liquid platform to build diversified, goal-oriented portfolios.”
Alternatives are becoming mainstream for the wealthy
For those with serious capital, India’s alternatives ecosystem has evolved from niche to necessary. Cumulative commitments raised jumped from Rs4.5 trillion at end-FY21 to Rs15 trillion by H1FY26. Within this, Category III AIFs—covering long-short equity, arbitrage, and other market-linked strategies—have seen their share rise “from ~21% to ~32%” over the same period. “While Category II continues to dominate,” Centrum observes, “accelerating inflows underscore the growing popularity of Category III strategies.”
This matters even if you’re not an ultra-high-net-worth individual, because product innovation in alternatives eventually trickles down to mass-affluent investors through new fund structures and lower minimum investments.
The infrastructure is scaling to match demand
Behind the scenes, India’s asset servicing industry has doubled its capacity. Assets Under Custody “have grown from Rs135tn in FY21 to Rs271tn at end FY25,” driven by what Centrum identifies as “rising institutional and retail participation, strong mutual fund AUM growth and higher FPI inflows.” About 17 registered custodians now operate in what the report describes as “a competitive landscape,” supported by technology upgrades handling everything from passive funds to structured strategies.
Primary market activity hit records in FY2025, with “an all-time high of Rs3.9tn raised through equity and Rs11.1tn via debt,” says Centrum. M&A deal values climbed 26% year-on-year to nearly $100 billion. But the most striking number for retail wealth builders is demat accounts: they’ve risen “from ~41mn in FY20 to >215mn by Dec’25″—a fivefold increase demonstrating what Centrum calls “the ongoing financialisation of household savings and the deepening of India’s capital markets.”
The India Security Brokerage Market was valued at $4 billion in 2024 and “is anticipated to reach $6.2bn by 2030,” though the report notes volumes are expected to recover from FY27 after a relatively muted FY26.
What this means for building wealth
Centrum maintains Buy ratings on both major listed wealth managers—360ONE WAM with a target of Rs1,429 (currently Rs1,169) and Nuvama Wealth with a target of Rs1,713 (currently Rs1,458). But the bigger takeaway for individual investors isn’t about these stocks. It’s about the ecosystem they operate in.
The gap between the $1.1 trillion in total wealth and the $680 million being professionally managed represents opportunity on both sides. Wealth managers will compete harder for your business, which means better service, lower fees, and more innovative products. The infrastructure is in place, the behavioral shift appears permanent, and the regulatory framework is supportive. That should bode well both as a consumer and investor.
