Equity Flows Shift Beyond Top 10 AMCs as Smaller Fund Houses Gain Ground

India’s mutual fund industry is seeing equity inflows spread across a wider pool of asset managers, with the largest fund houses accounting for a smaller share of fresh money coming into equity schemes. 

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The top 10 mutual fund houses captured 65.1% of net equity flows, excluding new fund offers, between April and July 2026, according to a September 18 report by PL Research. That was down from 72.8% in FY26. 

The change is even sharper among the three largest players. Their share of net equity flows fell to 34% from 42% over the same period, pointing to a broader distribution of investor money across the industry. 

PL Research linked the fragmentation partly to weaker equity returns, which have reduced the one-year weighted alpha across major mutual fund players. 

Smaller fund houses draw a larger share of flows 

The shift has coincided with stronger recent performance at some smaller fund houses. 

PL Research highlighted Bandhan, HSBC, Invesco and Edelweiss among asset managers that have delivered strong performance over one-year and three-year periods. The report noted that this has come alongside a redistribution of flows away from the industry’s biggest players. 

The change is not limited to the current financial year. 

According to data from the AMFI-Crisil Mutual Fund Factbook 2026 cited in the report, the top 10 asset management companies held 76.3% of the industry’s assets under management in March 2026. Their share stood at 81.7% in December 2021. 

At the same time, the number of AMCs operating in the industry increased from 43 in March 2022 to 51 by March 2026. 

Mutual fund industry AUM reaches ₹87.1 lakh crore 

The wider spread of equity flows has come even as the overall mutual fund industry continues to expand. 

Industry assets under management stood at ₹87.1 lakh crore in August 2026. Of this, equity and balanced categories accounted for ₹48.7 lakh crore, according to PL Research. 

The brokerage, however, expects the pace of growth in equity-linked assets to moderate. 

It has lowered its FY27 growth estimate for equity and balanced-category AUM to 18.5% from 21%, citing softer flows into balanced categories and relatively subdued market returns. 

Differences in market performance have also influenced how individual fund houses have fared. PL Research noted that Nifty 50 returns have remained subdued, while mid- and small-cap indices have performed better, contributing to differences in fund performance and the way investor flows are distributed. 

Listed AMCs could see softer near-term profit growth 

The changing flow pattern is also bringing the earnings outlook of listed asset managers into focus. 

PL Research expects core profit growth at listed AMCs to remain relatively soft in FY27 before improving over the following two years. It estimates that the listed AMC industry could deliver around 16% compound annual growth in core profit after tax between FY27 and FY29. 

The report also pointed to a different growth profile for non-AMC businesses such as Prudent and KFin Technologies, which have benefited from more diversified revenue streams. 

PL Research expects these non-AMC players to record stronger core profit growth than listed asset managers between FY26 and FY29. 

For the mutual fund industry, the latest flow data shows that scale alone is accounting for a smaller share of where new equity money is going. Recent fund performance is playing a greater role as investors allocate across a growing number of asset managers.