Mutual funds overtake FPIs as SIP inflows top ₹3T

A new milestone in India’s market structure

India’s mutual fund industry has crossed a key marker in the balance of capital in domestic markets. For the first time, mutual fund assets under control (AUC) across debt, equity, and ETFs have surpassed the assets held by foreign portfolio investors (FPIs), helped by steady retail inflows through systematic investment plans (SIPs). The change matters because it signals a growing role for domestic, retail-led money in market ownership and liquidity.

NSDL data showed mutual fund AUC at ₹7,641,000 crore, slightly above FPI assets at ₹7,622,000 crore. The gap is narrow, but the symbolic shift is significant because it comes after a period when SIP contributions have stayed consistently high, with monthly inflows often above ₹30,000 crore.

NSDL snapshot: Mutual funds edge past FPIs

The NSDL figures indicate that domestic fund pools are now comparable in scale to foreign portfolio holdings. The move also coincides with broader growth in mutual fund products, including rising adoption of debt schemes and ETFs alongside equity categories.

Aditya Agrawal, CFA, Chief Investment Officer at Avisa Wealth Creators, linked the crossover to persistent retail participation and product adoption. He said mutual funds overtaking FPIs “marks a structural shift in India’s capital markets,” driven by consistent SIP inflows and increasing usage of debt and ETF products.

FY26 close: AMFI data shows AUM growth despite volatility

AMFI data for FY26 showed the mutual fund industry closing the year with assets under management (AUM) rising 12.2% year-on-year to ₹7,373,000 crore, an increase of nearly ₹800,000 crore. The expansion came despite sustained equity market volatility, indicating that flows, not only market levels, contributed to asset growth.

The FY26 outcome reinforces the idea that monthly contributions through SIPs have become a stabilising source of inflows. It also shows how industry AUM can compound over time when systematic contributions stay elevated through market cycles.

SIP contributions: Record months and a strong run-rate

SIP contributions reached a record ₹32,087 crore in March, up from ₹29,845 crore in the previous month. Separately, SIP inflows were reported at ₹29,529 crore in October 2025, surpassing September’s ₹29,361 crore peak at the time.

Calendar-year SIP totals also expanded sharply. SIP investments rose to an all-time high of ₹334,000 crore in 2025, compared with ₹268,000 crore in 2024 and ₹184,000 crore in 2023, as per AMFI data referenced in the article. This sequence highlights how systematic contributions have moved from being a niche approach to becoming a mainstream investment habit.

Feroze Azeez, Joint CEO, Anand Rathi Wealth, described the 2025 total as reflecting long-term intent rather than short-term speculation. Industry voices also highlighted that SIPs can support rupee cost averaging and disciplined participation without trying to time market volatility.

February 2026: A separate data point on scale and SIP AUM

A Franklin Templeton report cited industry AUM at ₹8,203,000 crore in February 2026, up 27.1% from ₹6,453,000 crore a year earlier. The same data set noted monthly SIP gross inflows of ₹29,845 crore (up 15% year-on-year) and total SIP AUM of ₹1,664,000 crore, up 34%.

Another data point in the article stated that by November 2025, SIP AUM had reached ₹1,653,000 crore, accounting for more than 20% of industry AUM, citing ICRA Analytics. Together, these figures underline that SIP-linked assets have become a large and measurable portion of the overall mutual fund pool.

Domestic ownership rises as foreign ownership falls

Beyond AUM and AUC totals, ownership data suggests domestic institutions are steadily increasing their footprint in listed equities. The NSE Market Pulse report for November 2025 said domestic mutual funds (DMFs) held 10.9% of listed equities, hitting that level for the ninth consecutive quarter. In contrast, FPI ownership fell to 16.9%, described as the lowest in over 15 years.

The same report stated that in Q2 of FY26, DMFs made a record quarterly investment of 164 lakh into equities, supported by retail inflows through SIPs averaging ₹28,697 crore monthly.

What the long flow data shows about DIIs and mutual funds

The article also pointed to large cumulative purchases by domestic institutions. Over 25 months, domestic institutional investors (DIIs) invested ₹1,140,000 crore in domestic stocks, of which ₹880,000 crore (about 75%) came from domestic mutual funds.

During a period of trade tension with the US, FPIs sold ₹54,463 crore in July and August, while DIIs bought ₹150,000 crore, with mutual funds contributing ₹102,000 crore. These figures, as presented, support the argument that domestic flows can materially offset foreign selling in certain phases.

Key numbers at a glance

Market Impact

The crossover of mutual fund AUC over FPI assets strengthens the role of domestic liquidity in India’s capital markets. Persistent SIP inflows around the ₹29,000-₹32,000 crore monthly range provide a predictable base of demand that can cushion periods of foreign selling, as the July-August buy-sell comparison in the article illustrates.

It also changes how market participants interpret ownership and flow risks. With SIP AUM at ₹1,653,000-₹1,664,000 crore across the cited points, systematic investments have become large enough to influence aggregate industry AUM and the stability of mutual fund inflows.

Analysis: Why the shift matters for investors

The data points in the article describe a market where retail-led, systematic investing is contributing to a structural rebalancing. The combination of higher calendar-year SIP totals, rising SIP AUM, and growing domestic mutual fund equity ownership indicates that household financial savings are increasingly being routed into market-linked instruments.

At the same time, the small margin between mutual fund AUC and FPI assets shows that leadership can switch based on market moves and flows. Still, the consistency in SIP inflows, plus expansion in debt and ETF participation mentioned by Aditya Agrawal, suggests domestic pools are becoming broader-based rather than being driven by a single category.

Conclusion

Mutual funds have moved marginally ahead of FPIs in overall assets, supported by a steady SIP engine and rising retail participation. With FY26 AUM growth and record monthly contributions such as ₹32,087 crore in March, the key next data points will be subsequent NSDL and AMFI releases that show whether the gap widens or narrows.