March 13th ,2025: February saw a sharp decline in inflows into India’s equity mutual funds, reaching a 10-month low, according to data from the Association of Mutual Funds in India. Inflows dropped 26% month-on-month to Rs 293 billion ($3.4 billion), the steepest fall since April 2023.
Largecap funds saw a 6% dip in inflows, totaling Rs 29 billion, while smallcap and midcap funds experienced even steeper drops of 34% and 36%, respectively.
Investors are adjusting their strategies amid concerns over slowing economic growth, weak corporate earnings, and foreign selling. “Investors are taking a more cautious stance, waiting for clearer macroeconomic signals,” said Karthick Jonagadla, CEO of Quantace Research.
The Nifty 50 index has fallen 15% since its peak in September, with smallcap and midcap indexes down 24% and 21%, respectively. Additionally, the number of Systematic Investment Plan (SIP) accounts also decreased for the second month in a row, reflecting growing investor caution.
