The share of the northeastern states increased to 0.73 per cent of the total AAUM of the mutual fund industry, which stood at Rs 55.01 lakh crore in March 2024, up from around 0.67 per cent in March 2020, when the industry’s AAUM stood at Rs 24.71 lakh crore.
Though the contribution of these states to the total AAUM of the industry is still small in percentage terms, there has been a steady and consistent growth in mutual fund inflows in these states backed by increasing awareness among people and the growing interest among retail investors for investing in equities through the mutual fund route, Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said.
Assam, with an AAUM of Rs 29,268 crore, was the leading contributor among the Seven Sisters, accounting for nearly 73 per cent of the total AAUM of Rs 40,234 crore in March 2024. The AAUM of Assam grew by nearly 159 per cent in the last five years, up from Rs 11,298 crore in March 2020. Meghalaya accounted for 9 per cent of the total AAUM at Rs 3623 crore in March 2024, clocking a 111% growth over Rs 1714 crore in March 2020. Tripura accounted for 5 per cent at Rs 2174 crore (Rs 1155 crore in March 2020); Nagaland 4 per cent at Rs 1668 crore (Rs 965 crore); Arunachal Pradesh 3.8 per cent at Rs 1532 crore (Rs 525 crore; Manipur 2.9 per cent at Rs 1152 crore (Rs 403 crore) while Mizoram accounted for 2.25 per cent at Rs 907 crore (Rs 386 crore), ICRA Analytics data said.
“There has been a steady increase in awareness about the various investment options among people, primarily from smaller towns and cities. This, coupled with growing financial literacy and the surge in interest among retail investors for investing in equities through the mutual fund route, all contribute to a good growth in AAUM in towns and cities beyond the top 30. The investor awareness campaigns conducted by AMCs (asset management companies) in the northeastern region have also helped build awareness among people,” Kumar said.
However, mutual fund penetration still continues to be low in the country and there is a lot of scope for growth. The burgeoning middle class and rising financial literacy is likely to prompt more and more people to resort to financial planning so as to accrue savings and this is expected to shore up mutual fund investments in the northeastern states moving forward, he pointed out.
