Indian Retail Investors Boost Equity Mutual Fund Inflows to Record Levels

Despite market volatility in December, retail investors continued to show confidence in equities through mutual funds, with total inflows reaching Rs 41,156 crore. The month also witnessed record high systematic investment plan inflows of nearly Rs 26,460 crore. This sustained trend of 46 consecutive months of net inflows into equity funds highlights the growing maturity and resilience of Indian investors in navigating market fluctuations and economic challenges. Among equity schemes, mid and small-cap categories saw significant inflows, reaching a new monthly high since April 2019. However, sectoral and thematic funds emerged as the top performers within the category, attracting Rs 15,332 crore in net inflows. This shift indicates a structural change in investing culture, with investors showing increased awareness and a sophisticated approach to fund allocation. While the mutual fund industry's total assets under management dipped to Rs 66.9 lakh crore from Rs 68.1 lakh crore in November, this decline was largely influenced by outflows from debt funds, particularly from overnight, liquid, and money market schemes. The equity mutual fund AUM stood at Rs 30.57 lakh crore in December, showcasing robust growth compared to the previous year. Equity AUM's substantial increase from Rs 21.79 lakh crore in the same period last year indicates a remarkable year-on-year growth of 40.3%. This exponential growth trajectory underscores the escalating popularity of mutual funds among investors, with equity AUM constituting 46% of the overall mutual fund industry AUM. Despite market challenges, December marked the 46th consecutive month of net inflows into equity-oriented funds, with robust growth seen in gross inflows into active equity schemes, surging to Rs 72,115 crore. Notably, thematic funds continued to attract considerable investor interest, with net inflows almost doubling to Rs 15,331 crore in December compared to the previous month. Small- and mid-cap mutual fund schemes also witnessed record-high inflows in December, bucking concerns about associated risks. The trend reflects investors' confidence and willingness to explore various segments of the equity market. Although the overall mutual fund AUM experienced a decline in December, owing to significant outflows from debt schemes, the industry's AUM crossed Rs 68 lakh crore for the first time in November 2024, marking a substantial milestone. This achievement signifies a significant two-fold increase from 2019, highlighting the industry's rapid growth and investor participation. The trend of resilient equity inflows amid market uncertainties and the growing preference for mutual funds as a long-term investment avenue signal a positive outlook for the mutual fund industry in India.

The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) has seen approval from the Centre. This initiative, which entails a 60% guarantee coverage by the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions, is aimed at providing credit facilities up to Rs.100 crore to eligible MSMEs for equipment/machinery purchases. Under the scheme, Member Lending Institutions (MLIs) including Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs), and All India Financial Institutions (AIFIs) will receive 60% guarantee coverage for credit facilities up to Rs.100 crore given to qualified MSMEs. The focus is on supporting the manufacturing sector by offering loans for the acquisition of Plant and Machinery or equipment. The duration for loans sanctioned within the framework of MCGS-MSME is set at 4 years from the issuance of the operational guidelines or until the cumulative guarantee reaches Rs. 7 lakh crore, whichever arrives sooner. The primary objective is to promote manufacturing growth by facilitating credit availability for investment in Plant and Machinery/Equipment through collateral-free loans for MSMEs. The Mutual Credit Guarantee Scheme for MSMEs is a significant step towards easing access to credit for MSMEs seeking capital for expansion and development.

DLF Limited, India’s premier real estate developer, has marked a significant achievement with its latest project, The Dahlias, in Gurugram. The ultra-luxury residential endeavor has set remarkable standards, with two penthouses selling for an astounding Rs 150 crore each. In just nine weeks of its pre-launch phase, DLF accomplished sales totaling Rs 11,816 crore by selling 173 super-luxury apartments. The Dahlias, positioned as India's most expensive residential project, is situated beside DLF’s existing luxury community, The Camellias, in DLF Phase-5 on Golf Course Road, Gurugram. Covering 17 acres with a potential development of 7.5 million square feet, the project features apartments ranging from 10,000 to 12,000 sq ft, while penthouses offer 16,000 to 19,000 sq ft. Apartment prices vary between Rs 55 crore and Rs 125 crore, with penthouses starting at Rs 150 crore. DLF's joint managing director and chief business officer, Akash Ohri, reported this outstanding success. He noted that The Dahlias contributed significantly to DLF's Q3 FY25 sales bookings, amounting to Rs 12,093 crore. The price per square foot on carpet area at The Dahlias stands at Rs 1.05 lakh, among the highest in the country, and Rs 65,000 per sq ft on super area. Exclusive invitations were extended for sales at The Dahlias, attracting NRIs, entrepreneurs, industrialists, and high-net-worth individuals. Notably, 40% of buyers hail from existing DLF projects like The Camellias, The Magnolias, and The Aralias, underscoring customer loyalty. NRIs constitute 12% of the sales, indicating global interest in the project. DLF's leadership in luxury housing is further solidified by maintaining a consistent price point of over Rs 100 crore per apartment. The Dahlias alone is projected to generate revenue of Rs 35,000 crore, surpassing that of The Camellias by 2.5 times. Post-pandemic, a surge in demand for luxury and ultra-luxury housing is evident, exemplified by the record Rs 190 crore penthouse sale at The Camellias in December 2024. In financial terms, DLF reported a notable 62% YoY increase in net profit to Rs 1,055 crore for Q3 FY25, with consolidated revenue rising by 6% YoY to Rs 1,737.41 crore. The company's new sales bookings for the first nine months of FY25 exceeded expectations at Rs 19,187 crore, surpassing the annual guidance of Rs 17,000 crore. DLF's strategic positioning in the luxury real estate market, exemplified by The Dahlias, establishes its enduring prominence as a leading developer of ultra-luxurious residential properties.

In a recent speech at the 12th convocation of Pandit Deendayal Energy University in Gandhinagar, Gujarat, Mukesh Ambani, Chairman of Reliance Industries, shared valuable life lessons and insights for the graduating students. He outlined five guiding principles, emphasizing the significance of passion, continuous learning, sharing knowledge, fostering relationships, and cherishing family bonds. Ambani stressed the importance of green technologies and innovation to ensure economic growth without compromising the environment. He highlighted the intersection of green materials and artificial intelligence as crucial for future innovation, envisioning India as a global economic and green powerhouse under Prime Minister Modi's leadership. Additionally, Uday Kotak, founder of Kotak Mahindra Bank, the chief guest at the convocation, emphasized the pursuit of excellence and value of combining science with imagination. He underscored the need for the institution to offer courses in finance to align with the amalgamation of finance and technology in today's world. Ambani and Kotak inspired the graduates to dream big, work hard, and lead with purpose, instilling confidence in India's promising future as a leading global economy. The ceremony celebrated the students' role in shaping the nation's destiny and emphasized the endless opportunities that lie ahead in their professional and personal journeys.

Eco Recycling Limited, a waste management firm, has announced its plans to raise funds through a Qualified Institutional Placement (QIP) process. This method entails selling securities to qualified institutional buyers in the stock market to secure capital. The company aims to issue equity shares with a face value of ₹10 each to QIBs under the supervision of SEBI. The board of directors has approved the QIP fundraising, appointing GYR Capital Advisors Pvt Ltd as the book-running lead manager and Vidhigya Associates, Advocates as the legal counsel for the offer. Despite a 2.78% drop in share price to ₹807.40 after Friday's trading session, the stock has demonstrated significant growth. It hit a 52-week high at ₹1,215.10 and a low of ₹378, with a market capitalization of ₹1,558.02 crore. Investors have seen over 104% returns in the past year and a remarkable 2,000% growth over the last five years. However, YTD performance shows a 16.81% decrease. The company's future trajectory will be influenced by the success of the QIP and its utilization.

Equity mutual funds in India experienced a remarkable upsurge in inflows in 2024, reaching nearly Rs 4 lakh crore, more than double the previous year's total. This surge signifies robust investor confidence and a growing trend towards long-term investments, notably through Systematic Investment Plans (SIPs). The Association of Mutual Funds in India (AMFI) revealed that equity and equity-oriented schemes attracted inflows amounting to Rs 3.94 lakh crore, a substantial increase from Rs 1.61 lakh crore in 2023. This surge led to a 40% growth in the assets under management (AUM) of the mutual fund industry, with AUM reaching Rs 30.57 lakh crore by December 2024 compared to Rs 21.8 lakh crore in 2023. The industry's growth has been attributed to stable market performance, improved financial literacy, and the rising popularity of SIPs, which offer a structured approach to investing. Thematic funds garnered the highest net inflows in equity schemes, with midcap and small-cap funds also witnessing significant inflows. This trend indicates investor confidence, particularly in the small and mid-cap segments, which delivered strong returns in 2023 and 2024. SIPs have emerged as a key driver in the mutual fund industry, with total SIP contributions reaching Rs 2.5 lakh crore in 2024. December saw a record monthly SIP contribution of Rs 26,459 crore, highlighting the growing reliance on SIPs for investment. The number of investors participating in equity funds has increased substantially, with the folio count rising to 15.75 crore by December 2024. This surge underscores the escalating interest in equity mutual funds among Indian investors, signaling a shift towards financial inclusion and a preference for equity investments. According to Navneet Munot, Chairman of AMFI, the Indian mutual fund industry is on track to achieve the milestone of Rs 100 lakh crore AUM in the coming years. Munot emphasized the industry's remarkable growth over the past decade and the transformation towards turning savers into investors. While the industry anticipates continued expansion, Munot stressed the importance of maintaining a long-term investment perspective and asset allocation strategy amidst market volatility. The collaboration between AMFI and the Indonesian investment managers association aims to enhance bilateral relations and foster mutual growth in the investment management industries of both countries. In a nutshell, the surge in equity mutual fund inflows in India reflects heightened investor confidence, a growing inclination towards long-term investments, and the increasing popularity of SIPs. As the industry continues to evolve, maintaining a disciplined investment approach and focus on long-term growth will be essential for investors.

The Sri Lankan government has initiated a review of electricity tariffs with the Adani Group by establishing a special committee. This decision follows the overturning of a tariff determination made by the previous administration. Although the agreement for wind power projects remains unchanged, the new committee will evaluate and renegotiate tariffs with the Adani Group. In May 2024, the former government agreed to purchase electricity at 8.2 cents per kWh for a 20-year period from Adani Green Energy for the development of wind power projects generating 484 MW of power. However, the current government has decided to reassess the agreed tariff, maintaining the broader deal intact while reviewing the specifics. Adani Group has clarified that the 484 MW wind power projects in Mannar and Pooneryn in Sri Lanka have not been canceled. The company is currently involved in a standard review process with the Sri Lankan government and remains dedicated to investing $1 billion in the country's green energy sector. This development in Sri Lanka comes in the wake of Bangladesh's order to review its power contract with Adani Group. Adani Green Energy posted strong performance in its Q3 financials, with net profits surging over 85% compared to the previous year. Amidst reports of the Sri Lankan government reassessing the power deal, Adani Group has affirmed that the projects are ongoing and dismissed the rumors as false and misleading. The Sri Lankan government's review of project tariffs under the new administration is part of a routine evaluation process, while Adani Group's commitment to investing in green energy in Sri Lanka remains unchanged. In November 2024, US authorities charged Adani Group's founder with bribery, prompting investigations into the company's projects in Sri Lanka. Despite these challenges, Adani Group reiterated its dedication to investing in Sri Lanka's renewable energy sector and economic growth. The ongoing developments highlight the importance of renewable energy projects and the complexities of international agreements in the energy sector. The Adani Group's commitment to sustainability and investment in green energy remains unwavering amidst evolving circumstances.