India's mutual fund industry expands as passive AUM surges and multicap funds pivot to banks and consumers

Passive investing in India has exploded, with assets under management rising from under ₹1 lakh crore in 2018 to about ₹14‑15 lakh crore by the end of 2025 – an almost 18‑fold increase. Index funds, exchange‑traded funds and fund‑of‑funds now account for roughly 18% of the country's total mutual‑fund assets, driven by greater investor awareness, digital platforms and the appeal of low‑cost, rule‑based products.

In April 2026, the country’s leading multicap fund managers rebalanced portfolios, executing 56 fresh buys, 148 position increases and a total of 534 actions. They shifted heavily toward banks, finance and consumer‑linked sectors while trimming exposure to IT software and capital‑market stocks. HDFC Bank saw the biggest increase, with five asset‑management companies adding to its holding, followed by Larsen & Toubro, Bajaj Finance, NTPC and Tata Steel. New purchases included ABB India, UltraTech Cement and Eicher Motors, whereas sellers included Bharti Airtel, Coforge, Persistent Systems, Oil India and Tata Motors.