In a positive development for the financial scenario of Nagaland, mutual fund investments have seen a surge over the past four years from March 2020 to March 2024. According to a recent report by ICRA Analytics (formerly Investment Information and Credit Rating Agency of India Limited), Nagaland accounted for 4% of the total Average Assets Under Management (AAUM) in the Northeast region at Rs 1,668 crore in March 2024, up from Rs 965 crore in March 2020. This represents a growth of 73%.
According to the report, the AAUM of northeastern states has soared from Rs 16,446 crore in March 2020 to an impressive Rs 40,324 crore by March 2024 amounting to a staggering growth of 145%. It said that the share of the northeastern states has increased from 0.67% to 0.73% of the total AAUM of the national mutual fund industry and stood at Rs 55.01 lakh crore in March 2024.
Assam emerged as the frontrunner among the seven sister states, accounting for a substantial 73% of the total AAUM in March 2024. The state’s AAUM witnessed a remarkable growth of nearly 159% over the past five years, reaching Rs 29,268 crore from Rs 11,298 crore in March 2020, according to a report from ICRA.
Other northeastern states have also witnessed substantial growth in their AAUM. Meghalaya and Tripura have contributed 9% and 5%, respectively, to the total AAUM of the region in March 2024. Meghalaya’s AAUM stood at Rs 3,623 crore, marking a growth of 111% since March 2020. Similarly, Tripura saw their AAUM grow to Rs 2,174 crore.
Arunachal Pradesh contributed 3.8% at Rs 1,532 crore. Manipur contributed 2.9% at Rs 1,152 crore while Mizoram accounted for 2.25% at Rs 907 crore, said data by ICRA Analytics.
Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics said, ”Though the contribution of these states to the total AAUM of the industry is still small in percentage terms, there has been a steady and consistent growth in mutual fund inflows in these states”.
According to Kumar, this is due to the increasing awareness among people and the growing interest among retail investors for investing in equities through the mutual fund route.
”There has been a steady increase in awareness about the various investment options among people, primarily from smaller towns and cities. This, coupled with growing financial literacy and the surge in interest among retail investors for investing in equities through the mutual fund route, all contribute to good growth in AAUM in towns and cities beyond the top 30. The investor awareness campaigns conducted by AMCs (asset management companies) in the northeastern region have also helped build awareness among people,” Kumar said.
However, he pointed out that mutual fund penetration still continues to be low in the country and there is a lot of scope for growth. The burgeoning middle class and rising financial literacy is likely to prompt more and more people to resort to financial planning so as to accrue savings and this is expected to shore up mutual fund investments in northeastern states moving forward. Overall, the Indian mutual fund industry continues on its growth momentum with an increase in inflows across both debt and equity-oriented schemes in April 2024.
The net Asset Under Management (AUM) of the industry, which posted 35 percent growth in 2023-24, continued to register a stellar performance in April 2024 as it surged by nearly 38 per cent year-on-year to Rs 57.26 trillion as compared with Rs 41.62 trillion in April 2023.
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