India’s mutual fund industry recorded net inflows of ₹250.82 billion in to equity-oriented schemes in March 2025, the lowest since March 2024, according to the latest AMFI data. This marks the third consecutive monthly decline, down 14.4% from February’s ₹293.03 billion, and  39% fall  from December 2024’s peak of ₹411.66 billion, signalling weakening retail participation amid heightened market volatility. 

Sectoral/Thematic Funds, earlier the top equity category for 2024-25, saw inflows nosedive 97% month-on-month to ₹1.70 billion in March— their lowest level since May 2023. This decline is largely attributed to heightened market volatility and the recent underperformance of specific sectoral themes.

Yet, over the full year, Sectoral/Thematic Funds led equity fund inflows across and saw assets under management surge from ₹2.97 trillion in March 2024 to ₹4.55 trillion by March 2025—a 1.5x jump. The sudden pullback in March indicates a shift in investor preference from thematic bets toward more diversified or flexible strategies.

Other equity categories fared better. Small Cap Funds continued to attract strong inflows at ₹40.92 billion, up 9.93% month-on-month, while Mid Cap Funds saw a modest rise of 0.94% to ₹34.39 billion. Flexi Cap Funds rose by 10.01% to ₹56.15 billion during the month. Multi Cap and Focused Funds attracted ₹27.53 billion and ₹13.86 billion, respectively.

On the flip side, Large Cap Funds saw inflows decline 13.49%, slipping from ₹28.66 billion in February to ₹24.79 billion in March. ELSS schemes, however, showed signs of revival with a 19.63% increase in inflows to 7.35%—likely boosted by year-end tax planning.

Despite continued investor interest in mid and small-cap categories, the industry witnessed net outflows of ₹1.64 trillion in March, primarily driven by quarter-end debt fund liquidations and foreign investor exits, highlighting caution amid volatility and fiscal year-end liquidity requirements.

Debt-oriented schemes posted net outflows of ₹2.03 trillion, significantly higher than February’s ₹65.26 billion. These redemptions are consistent with past trends of quarter-end liquidations, largely driven by advance tax payments.
Liquid Funds bore the brunt, with outflows of ₹1.33 trillion, followed by Overnight Funds at ₹300.16 billion and Money Market Funds at ₹213.01 billion. Ultra Short Duration and Short Duration Funds also experienced sustained outflows. The only debt category with positive momentum in February—Corporate Bond Funds—reversed to an outflow of ₹4.14 billion in March.

SIP Flows Slow Down 
Systematic Investment Plan contributions stood at ₹259.26 billion in March, marginally below February’s ₹259.99 billion, and down from the December peak of ₹264.59 billion. This marks the third straight monthly fall, hinting at growing caution among retail investors.

Meanwhile, foreign institutional investors continued to offload Indian equities for the third consecutive month. Net FII outflows stood at ₹39.73 billion in March. For the quarter, FIIs withdrew ₹1.17 trillion from Indian equities—a stark contrast to the ₹109 billion inflow in the same quarter last year. FIIs also pulled out ₹8.20 billion from Indian mutual funds in March.

The mutual fund industry’s total assets under management rose to ₹65.74 trillion, up 1.87% from ₹64.53 trillion in February and 23.11% higher than ₹53.40 trillion in March 2024. 

SIP stoppage rose further as 5.1 million accounts discontinued versus 4 million new registrations. The SIP stoppage ratio for the month rose to 127.5% from 122% in February.