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Yash Agarwal
हिन्दी

← ResearchResearch10 min read

Mutual fund money from smaller towns: how much comes from beyond the top 30 cities?

Places outside India's 30 biggest mutual fund cities now hold about a fifth of all mutual fund money. Their share has grown, but slowly, and the big cities still hold four rupees out of every five.

A simple look at AMFI's data on mutual fund money from beyond India's top 30 cities (B30): how the share changed from 2018 to 2026, why smaller towns hold mostly equity funds, how states compare per person, and what happened to SEBI's B30 incentive.

You often read that mutual funds are no longer a big-city habit. New investors are signing up from small towns, not just from Mumbai and Delhi. The data agrees, but the change is slower than the headlines suggest.

A mutual fund collects money from many people and invests it for them, in shares, bonds or both. AUM, or assets under management, is the total value of the money a fund looks after. AMFI, the industry body of Indian mutual funds, splits the industry’s AUM by where investors live:

  • T30 means the top 30 locations, the 30 cities where the most mutual fund money comes from. In AMFI’s March 2024 city list, Mumbai, Delhi, Bengaluru, Pune and Kolkata were the top five.
  • B30 means “beyond the top 30”. It is everything else: smaller cities, towns and villages.

In July 2026, B30 locations held ₹16.37 lakh crore, or 19.1% of all mutual fund money. The top 30 cities held ₹69.38 lakh crore, or 80.9%.1

A slow climb

Share of mutual fund AUM from beyond the top 30 cities (%)
15%16%17%18%19%20%2019202120232025Jul 26

End of March each year, plus July 2026. 2020 is from a media report of AMFI data.Source: AMFI-Crisil Factbooks 2024 and 2026; AMFI Investor Trends, July 2026; Cafemutual

In March 2019, B30 locations held 15.3% of the industry’s money. By March 2025 that had risen to 19.6%. It slipped back to 18.9% in March 2026 and was 19.1% in July 2026.2

In money terms the growth looks bigger. Between March 2021 and March 2026, B30 assets went from ₹5.2 lakh crore to ₹13.9 lakh crore. Top-30 assets went from ₹26.2 lakh crore to ₹59.8 lakh crore. Smaller towns grew a little faster, about 2.7 times against 2.3 times, so their share went up.2 But both grew a lot, which is why the share moved only a few points.

There is one more reason to be careful. AMFI’s first B30 numbers, for April 2018, already put the share at a little over 17%.3 The March 2019 figure was lower than that. So depending on which starting point you pick, the share of smaller towns has risen by somewhere between 2 and 4 percentage points in about eight years. That is real progress, but it is not a revolution.

I compare March with March on purpose. At the end of each financial year, companies pull large sums out of short-term debt funds. In March 2026 alone, debt funds lost a net ₹2.95 lakh crore.4 Most of that company money sits in the big cities, so the B30 share tends to look a little higher in March than in other months.

Individuals tell a different story

The overall share hides something important. A large part of mutual fund money in the big cities belongs to companies, banks and other institutions, not people. Companies park spare cash in short-term debt funds, and almost all institutional mutual fund money comes from the top 30 cities.

So it helps to look at individuals only. In July 2026, B30 locations held 27.8% of all the mutual fund money owned by individuals. For institutions, the B30 share was just 4.7%.1 In March 2019, B30 had 23% of individuals’ money and about 6% of institutions’ money.5

Counted this way, people in smaller towns own more than a quarter of what individuals hold in mutual funds, and their share has grown by about five points since 2019. The most recent figures show the gap narrowing. In the first half of 2026, individuals’ fund money in B30 locations grew 5.2%, against 4.5% in the top 30 cities. In 2025 the gap was much wider: 25.7% against 15.9%.6

Smaller towns buy shares, big cities park cash

Equity funds invest mainly in shares. Debt funds invest in bonds and other loans, and liquid funds hold very short-term loans that work almost like a bank deposit. Hybrid funds mix shares and bonds.

Where mutual fund money sits, July 2026 (% of each area's AUM)
  • Beyond top 30
  • Top 30 cities
0%20%40%60%80%EquityHybridDebtIndex,ETF, otherBeyond top 30, Equity: 65.9%Beyond top 30, Hybrid: 15.7%Beyond top 30, Debt: 8.1%Beyond top 30, Index, ETF, other: 8.8%Top 30 cities, Equity: 39.8%Top 30 cities, Hybrid: 13.1%Top 30 cities, Debt: 26.1%Top 30 cities, Index, ETF, other: 20.4%

Equity means equity-oriented schemes. 'Other' covers index funds, gold and other ETFs and overseas fund of funds. Solution-oriented funds (1.5% and 0.5%) are left out.Source: AMFI Investor Trends, July 2026

Two thirds of B30 money is in equity funds. In the top 30 cities it is under two fifths. Debt funds are 8.1% of B30 money but 26.1% in the big cities.1

Part of this is the institution effect again. Institutions own about 80% of the money in debt funds, and 95.3% of all institutional money sits in the top 30 cities.1 So the gap does not, by itself, show that big-city families like shares less. It does mean that when you read “B30 share”, a good part of the big-city lead is company money, not household money. For how much of this equity money arrives through monthly SIPs, see the SIP post.

States: big, small and per person

AMFI also splits AUM by state. In July 2026, five states held about 71% of all mutual fund money: Maharashtra 37%, Delhi 15%, Karnataka 7%, Gujarat 7% and West Bengal 5%. Every other state and union territory together held 28%.7

Size alone is misleading, because Maharashtra and Uttar Pradesh have very different populations. AMFI publishes its own figures for average AUM per person, using population estimates from UIDAI (the body that runs Aadhaar). The table shows a selection.

State, August 2026 Average AUM (₹ crore) Equity share AUM per person
Maharashtra 35,24,257 31% ₹2,74,616
Delhi 8,73,718 38% ₹3,94,526
Karnataka 6,13,169 50% ₹89,464
Gujarat 6,03,129 55% ₹82,364
Tamil Nadu 3,88,227 46% ₹50,212
Uttar Pradesh 3,75,472 65% ₹15,614
Kerala 1,17,147 64% ₹32,484
Bihar 89,960 73% ₹6,897

The gaps are huge. Delhi has about ₹3.95 lakh of mutual fund money per person, and Bihar about ₹6,900. That is roughly 57 times as much.8 Uttar Pradesh is the seventh-biggest state by mutual fund money, but per person it has about one eighteenth of Maharashtra’s figure.

Two cautions apply. First, these figures include company money, which is why Delhi and Maharashtra look so rich. More than half of the mutual fund money in both comes from non-individuals.7 Second, the poorer states hold mostly equity, 73% in Bihar and 65% in Uttar Pradesh, so their money comes almost entirely from people.

Some smaller states are growing fast from a low base. Jharkhand, Kerala, Uttarakhand, Puducherry, Manipur and Lakshadweep more than tripled their mutual fund money between March 2021 and March 2026.7 For where new share-market investors come from, district by district, see the demat post.

SEBI’s B30 incentive

SEBI, the market regulator, has tried for years to push mutual funds into smaller towns.

  • 2012. SEBI let fund houses charge investors up to 0.30% a year extra in fees (30 basis points; a basis point is one hundredth of a percent) if enough new money came from beyond the top 15 cities. The extra fee was meant to pay distributors, the agents who sell funds, to work in those places.9
  • 2018. The rule moved from “beyond 15” to “beyond 30” cities. Later that year SEBI said only money from individuals would count, not money from companies.10
  • March 2023. SEBI put the incentive on hold. It had found distributors splitting one investment into several smaller ones, under ₹2 lakh each, to earn the bonus. It also found “churning”: units from B30 cities held for just over a year, then sold and bought back in the same scheme within five days, only to earn the bonus again.11
  • 2025 and 2026. SEBI deleted the old rule in October 2025 and replaced it with a smaller, one-time payment. A distributor now gets 1% of a new investor’s first investment, up to ₹2,000, for bringing in someone who has never invested in mutual funds before. This applies to new investors from B30 locations and to new women investors anywhere. For a lump sum, the investor must stay invested for a year. The money comes from a pot that fund houses already set aside for investor education, not from a higher fee. It started on 1 March 2026, a month later than first planned.12

The new design pays for new people, not for money moved around. That should be harder to game. It is too early to see any effect in the data.

Distributors still do the selling

Most money from smaller towns still comes through distributors rather than direct plans (where you buy from the fund house yourself and pay a lower fee). In July 2026, about seven in ten rupees that B30 individuals held in mutual funds had come through a distributor.13 Big-city individuals now look very similar, at about seven in ten as well. So for individuals, depending on distributors is no longer mainly a small-town habit.

The number of distributors grew much faster in smaller towns. Between March 2021 and March 2026, B30 locations added 61,018 distributors, a 61% rise, against 36,239 in the top 30 cities, a 25% rise.13 The old incentive was on hold for most of that period, so it cannot be the only reason. Phone apps, SIPs and rising markets probably all played a part, but this data cannot tell us how much each one mattered.

What this means

Mutual fund investing has spread beyond the metros, but slowly. The headline B30 share has moved a few points in eight years. The share of individuals’ money has moved more, and that is the better measure of whether ordinary people in smaller towns are investing. The big unknown is what happens in a long market fall. B30 money is heavily in equity funds, so in a crash it would probably shrink faster than big-city money, which has more debt funds in it. A fall in the B30 share during a bad year would not, by itself, mean people stopped investing.

Footnotes

  1. AMFI, Investor Trends, July 2026, regional trends section: T30 ₹69.38 lakh crore (80.9%), B30 ₹16.37 lakh crore (19.1%); asset mix by area; B30 held 27.8% of individual investors’ assets and 4.7% of institutional assets (so 95.3% of institutional assets were in T30); institutions held 80.1% of debt-oriented scheme assets. The top five cities are from AMFI’s AUM by Geography list for 31 March 2024. ↩ ↩2 ↩3 ↩4

  2. AMFI-Crisil, Mutual Fund Factbook 2026, B30 and T30 AUM at the end of March 2021 to 2026; AMFI-Crisil Factbook 2024 for March 2019 (15.3%); March 2020 from Cafemutual, 11 May 2020, citing AMFI (₹3.55 lakh crore of ₹22.26 lakh crore). The yearly shares for 2020 to 2026 and the growth multiples are my arithmetic: B30 divided by B30 plus T30, using AMFI’s rounded figures. AMFI revised its list of cities and states from March 2026, so 2026 may not be exactly comparable with earlier years. ↩ ↩2

  3. Business Standard, MFs offer extra incentives to rake in big money from smaller towns, 3 June 2018, citing AMFI data for April 2018: B30 ₹4.02 trillion and T30 ₹19.2 trillion. The share (17.3%) is my arithmetic. Before 2018 AMFI and SEBI used a “beyond top 15” split, which cannot be compared with B30. ↩

  4. AMFI, Monthly Note, August 2026, monthly flows table: debt fund net flow of minus ₹2,94,987 crore in March 2026. ↩

  5. Cafemutual, 23 April 2019, citing AMFI data for March 2019. ↩

  6. Business Standard, B-30 mutual fund assets outpace metros again, but growth gap narrows, 31 July 2026. The paper cites industry data it accessed; I could not find the same figures in an AMFI document. ↩

  7. Top five states in July 2026 from AMFI Investor Trends, July 2026. State figures for August 2026 from AMFI, State-wise average AUM and its composition, August 2026. The five-state total (about 71%) is my arithmetic from AMFI’s rounded shares; the Factbook gives 70.23% for March 2026. Non-individual shares (Delhi 55.64%, Maharashtra 51.7%) and the fast-growing states are from the AMFI-Crisil Factbook 2026. ↩ ↩2 ↩3

  8. AMFI, State-wise AAUM per capita, August 2026. AMFI uses average AUM for August 2026 and UIDAI population estimates as of 31 March 2025. The comparisons (57 times, one eighteenth) are my arithmetic from AMFI’s per-person figures. ↩

  9. SEBI, circular CIR/IMD/DF/21/2012, 13 September 2012. The full extra fee applied only if new money from beyond the top 15 cities reached a set share of the scheme’s inflows or assets, and it was clawed back if the money left within a year. ↩

  10. Business Standard, 3 June 2018 (note 3); SEBI board meeting memorandum on expense ratios, October 2018, para 5.7; SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/137, 22 October 2018. ↩

  11. AMFI, letter to distributors on the B-30 incentive, 7 March 2023, conveying SEBI’s findings. The hold applied from 1 March 2023. ↩

  12. SEBI, circular HO/(83)2025-IMD-POD-1/I/152/2025, 27 November 2025, and extension circular, 7 January 2026. ETFs, most domestic fund of funds and very short-term debt funds are excluded. I found no later change as of October 2026. ↩

  13. Distributor shares: AMFI Investor Trends, July 2026, which splits individuals’ assets into B30 through distributors (about 20%), B30 direct (about 8%), T30 through distributors (about 50%) and T30 direct (about 22%); the seven-in-ten figures are my arithmetic. Distributor counts, including registered employees of distributors: AMFI-Crisil Factbook 2026 (B30 from 1,00,406 to 1,61,424; T30 from 1,43,380 to 1,79,619). ↩ ↩2