Smaller mutual fund houses are gaining ground in India’s actively managed equity mutual fund market, with the market share of the top 10 asset management companies (AMCs) declining to 71.
3 per cent in the first four months of FY27 from 73 per cent in FY25, according to a report by Kotak Institutional Equities.
The report, said the shift reflects intensifying competition from mid-sized and smaller fund houses, differences in fund performance and changing distribution dynamics across the mutual fund industry.
Data compiled by Kotak showed that the top 10 AMCs accounted for 71.3 per cent of the market in actively managed equity-oriented mutual fund average assets under management (MAAUM) in the first four months of FY27, compared with 85.2 per cent in FY14. The remaining players’ share increased to 12.5 per cent from 11.2 per cent over the same period.
The shift is significant because large AMCs have historically benefited from stronger brands, scale and wider distribution networks. However, Kotak said recent flow trends show smaller players gaining share as fund performance increasingly influences where fresh investor money goes.
“MF flow trends: Steady overall with smaller players gaining share,” the report said.
Kotak noted that smaller fund houses can attract disproportionately large inflows when one or two schemes perform strongly.
“Some of the smaller AMCs occasionally have strong performance in one or two key funds, which then drives disproportionate inflows,” the report said.
The brokerage, however, cautioned that such gains can reverse if performance weakens, adding that the ability of smaller AMCs to consistently take a larger share of flows remains a long-term competitive risk for the bigger players.
The change in market share is taking place even as overall mutual fund flows remain relatively steady. Kotak said Indian AMCs remain heavily exposed to retail investors and equities, making market returns an important risk, but investor behaviour has so far remained resilient, “largely driven by SIP flows.”
The report also flagged changing distribution dynamics, saying large distributors have taken higher commission shares from bigger AMCs, which can push more incremental flows towards smaller, better-performing fund houses.
For the mutual fund industry, the trend points to a gradual broadening of competition, with performance and distribution becoming increasingly important in determining which fund houses gain investor money and market share.