₹87.08 lakh crore. That is the size of India’s mutual fund industry today.

But the number becomes more interesting when you look at where it came from.

The industry now has 28.35 crore investor folios (as of August 31, 2026), with an average of 26.16 lakh new folios being added every month over the last five years.

Six decades ago, India’s mutual fund industry looked very different. There was no crowded AMC landscape, no SIP boom and nowhere near today's scale.

There was just the beginning of an idea: get more Indians to save, invest and participate in the securities market.

And that is where the story goes back to 1963. 

1. It Started With Just One

In 1963, India set up the Unit Trust of India (UTI) through an Act of Parliament, with the Government of India and RBI aiming to encourage saving, investment and wider participation in the securities market.

UTI launched its first scheme, Unit Scheme 1964 (US '64), in 1964.

At the time, the idea was relatively simple: pool money from investors and invest it across securities, giving ordinary investors a way to participate in the market.

For more than two decades, UTI dominated the industry.

By the end of 1988, it had reached ₹6,700 crore in Assets Under Management (AUM).

That may look tiny compared with today's numbers. But this was the foundation on which everything else was built.

2. Then, UTI Got Company

The first major shift came in 1987.

SBI Mutual Fund became the first “non-UTI” mutual fund, followed by Canbank Mutual Fund (December 1987), Punjab National Bank Mutual Fund (August 1989), Indian Bank Mutual Fund (November 1989), Bank of India (June 1990) and Bank of Baroda Mutual Fund (October 1992).

LIC entered the space in 1989, while GIC followed in 1990.

Suddenly, mutual funds were no longer a one-player industry.

More institutions meant more schemes, more investment choices and greater participation.

By the end of 1993, the industry's AUM had climbed to ₹47,004 crore.

But the bigger disruption was still coming.

3. Private Players Enter the Chat

The 1990s changed India's financial markets, and mutual funds were no exception.

SEBI was established in April 1992, and in 1993 the government opened the mutual fund industry to private-sector players.

The first private-sector mutual fund registered with SEBI was Kothari Pioneer, which is now merged with Franklin Templeton Mutual Fund.

This changed the competitive landscape completely.

Foreign sponsors entered. More AMCs emerged. Schemes multiplied. Investors suddenly had a much wider range of choices.

The first SEBI Mutual Fund Regulations came in 1993, covering mutual funds other than UTI. They were subsequently replaced in 1996 by the more comprehensive SEBI (Mutual Fund) Regulations, 1996, which continue to form the regulatory framework for the industry to this day.

And another important development emerged during this phase: SIPs, which made investing more systematic and accessible for retail investors.

By January 2003, there were 33 mutual funds managing a total AUM of ₹1,21,805 crore, with UTI alone accounting for ₹44,541 crore.

The industry had gone from one institution to a competitive marketplace.

4. Then Came the Reality Check

The next phase wasn't exactly smooth sailing.

In February 2003, the repeal of the Unit Trust of India Act 1963, led to the bifurcation of the erstwhile UTI into two entities:

1. Specified Undertaking of the Unit Trust of India (SUUTI) 

2. UTI Mutual Fund

which operated under SEBI's mutual fund regulations. At the same time, mergers among private-sector funds began reshaping the industry.

But then came the 2009 global financial meltdown.

Markets fell sharply across the world, including India. Investors who had entered the market near its peak suffered losses, and confidence in mutual fund products took a hit.

SEBI's abolition of the entry load, combined with the after-effects of the crisis, added further pressure on the industry.

The result?

MF industry AUM growth remained sluggish between 2010 and 2013 as the industry worked through the fallout and tried to rebuild. For an industry built around getting people to invest, rebuilding investor confidence was just as important as growing assets.

5. Then Mutual Funds Went Mass M