Winning Bizness Desk
Mumbai.India’s investment landscape is witnessing a decisive generational shift, with young investors driving an unprecedented rise in equity-linked products. If the current pace of investing continues, mutual fund assets are projected to grow nearly four times in the coming ten years, while direct equity holdings are expected to surge seven times. The shift is led largely by investors aged 18 to 34, who now form the strongest base of SIP contributors and long-horizon equity participants.
Mutual fund assets may cross 300 lakh crore by 2035
A new report titled How India Invests 2025 by Bain & Company and Groww estimates that mutual fund assets under management could exceed 300 lakh crore rupees by 2035. Presently, this figure stands close to 80 lakh crore. Direct equity holdings, too, are poised to touch nearly 250 lakh crore rupees, up sharply from just over 35 lakh crore today. The report suggests that mutual fund penetration in India may rise to 20 percent from the current 10 percent as more young investors adopt systematic investment plans and long-term strategies.
Equity proves rewarding in long-term wealth creation
Historical data underscores the advantage of long-term investing. Equity-linked investments have delivered nearly 16 percent returns over the past 20 years, outperforming all major asset classes. A long investment horizon, typically five to seven years or more, helps investors ride out market volatility while benefiting from compounding. The report highlights that the growing preference for disciplined SIP-based investing is reshaping India’s retail participation in capital markets.
Key shifts highlighted in the study
- More than 80 percent of equity investors now use digital platforms
- Nearly 35 percent of mutual fund investors transact digitally
- Half of India’s new investors come from tier-2 and smaller cities
- SIP-driven investing is expanding rapidly among young professionals
- Domestic inflows are stabilising equity markets against global shocks
Digital adoption fuels new jobs and market resilience
The structural shift in investment behaviour is expected to generate nearly seven lakh new jobs in the coming years. With more domestic money flowing into equity markets, India is likely to become less dependent on foreign portfolio investors. Bain’s Rakesh Pozhath says India is entering a new and inclusive era of retail investing that will play a crucial role in supporting the country’s aspiration of becoming a 10 trillion dollar economy.
Deepening investor base to power India's growth
The surge in long-term investment habits among young Indians is reshaping the financial ecosystem. According to Bain’s Saurabh Trehan, longer holding periods and a steady rise in SIPs are helping broaden the investor base. Growing participation from smaller cities marks a major shift in India’s savings culture.
- Stronger domestic inflows could support economic expansion
- Digital channels are reducing entry barriers for new investors
This trend is now seen as a financial movement that will fuel India’s growth in the coming decade. As young investors embrace equity for long-term wealth creation, the financial markets are becoming more stable, inclusive and digitally driven.
