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Tier-II and III cities, collectively referred to as B30 locations, are emerging as the growth engine of India’s mutual fund industry, according to a recent report released by CAMS at the 18th Mutual Fund Summit held by the Confederation of Indian Industry (CII). As of January 2025, B30 cities accounted for 56 per cent of all new SIP registrations, up from 49 per cent in FY23, marking a compounded annual growth rate (CAGR) of 64 per cent.
Equity Assets under Management (AuM) in B30 cities have also kept pace with those in T30 metros, growing at a CAGR of 46 per cent over the same period. This has enabled B30 cities to retain a 26 per cent share of the overall equity AuM of the mutual fund industry.
The report, titled “B30 Locations – Performance & Potential”, draws from data sourced from CAMS MFDEx, which covers around 98 per cent of the mutual fund industry’s AuM. The report indicates that the B30 investor base now stands at around 2 crore, accounting for 58 per cent of the total first-holder investor base serviced by CAMS.
Speaking about the report, Rishi Kumar Bagla, Chairman, CII Western Region, said, “The report is a testament to the success of regulatory foresight and collaborative industry efforts. It’s encouraging to witness Bharat investing confidently, backed by access, awareness, and advisory.”
Retail participation continues to lead growth. Gross inflows into equity schemes from B30 locations have more than doubled over two years, growing from ₹1.3 lakh crore in FY23 to ₹2.7 lakh crore in FY25 (till January). Distributors such as mutual fund distributors (MFDs) and registered investment advisors (RIAs) have seen significant traction, with RIA-led SIP registrations increasing nearly four-fold during this period.
The data also points to a diversification trend among B30 investors. The proportion of investors with exposure to more than four mutual fund schemes rose from 20 per cent in March 2023 to 22 per cent in January 2025. Additionally, 47 per cent of B30 investors are now investing through more than one fund house, suggesting a maturing investment approach.
Age-wise segmentation shows that investors aged 20–40 years make up 56 per cent of the B30 investor base, signalling increasing interest from the younger demographic. Furthermore, 74 per cent of B30 investors are focused solely on equity schemes, with another 24 per cent diversifying across multiple asset classes.
The CAMS report suggests that the momentum in B30 locations is driven by sachet-sized SIPs, rising digital adoption, and widening access to financial advisory services. Locations beyond the top 10 B30 cities are witnessing faster growth, underscoring the potential of deeper penetration across smaller towns.
The share of B30 in the mutual fund industry’s total AuM now stands at 18 per cent, excluding cash-dominant institutional funds that are largely concentrated in T30 cities.
Published on April 15, 2025
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