India’s smaller towns and cities are steadily strengthening their contribution to the mutual fund industry. According to ICRA Analytics, assets under management (AUM) from locations beyond the top 30 (B30) cities touched Rs 14.50 trillion in September 2025, up from Rs 14.14 trillion in August — a rise of 2.6%. On a year-on-year basis, the growth stood at a robust 15%, highlighting the increasing role of non-metro investors in shaping India’s mutual fund landscape.
Data released by AMFI and analysed by ICRA Analytics shows that B30 locations now account for 19% of the mutual fund industry’s total assets, reflecting the deepening investor base beyond major metros. Assets from the top 30 (T30) cities also registered a healthy 14% annual growth, indicating that while metros remain critical, smaller cities are catching up steadily.
Investors in B30 centres continued to prefer equity assets, which made up nearly 77% of their total holdings, followed by 9% in balanced schemes. Debt-oriented funds comprised about 12% of B30 investments, compared with a much higher 30% in T30 markets, suggesting that risk appetite and investment behaviour vary significantly between metro and non-metro investors.
Retail participation from smaller cities remained strong. In September 2025, 27.5% of all individual investor assets originated from B30 cities, slightly higher than 26.9% a year earlier. However, institutional money continues to be dominated by metro centres, with 95% of such assets concentrated in T30 locations, according to ICRA Analytics.
The ICRA Analytics report also noted a gradual rise in direct participation. Around 27% of retail investors now invest directly in mutual funds, while 65% continue to route their investments through non-associate distributors. Among high-net-worth investors, nearly 29% prefer the direct route. Overall, about 48% of the industry’s total assets are invested directly, pointing to a growing awareness and confidence among investors in bypassing intermediaries.
ICRA Analytics said the sustained inflows from B30 cities signal rising financial literacy, greater comfort with digital investment platforms, and a broadening of India’s investor base beyond traditional urban strongholds. Analysts believe this trend could further diversify the industry and boost long-term growth prospects.