Gen Z's ‘Choti SIP’ Is Sparking A Micro-Investing Boom Across India
Over 50% of new investor accounts are now originating from beyond the top 30 urban hubs, fueled by deep smartphone penetration and a shift in mindset among younger Indians.
The Gist
- The industry has reached 259 million folios, with over 50% of new accounts coming from 'B30' towns.
- Women investors have surged by 30%, now exceeding 10 million, as more take financial decisions independently.
- CAMS is leveraging technology for faster transactions and is introducing loans against mutual funds to enhance accessibility.
A wave of first-time retail investors from India’s small towns and a surge in Gen Z participation are transforming the country’s mutual fund landscape, as the industry pivots toward "micro-investing" to sustain its record growth.
Anuj Kumar, Managing Director of Computer Age Management Services (CAMS), told The Core Report that the industry—which recently hit a milestone of 259 million folios—is experiencing a "mass retailisation" that has outpaced traditional bank deposits.
Over 50% of new investor accounts are now originating from "B30" towns (beyond the top 30 urban hubs), fueled by deep smartphone penetration and a shift in mindset among younger Indians who are now investing their pocket money into the markets.
"I think broadly, you are earning a large amount of money, and you are a big saver. Therefore, you invest. That theory is being turned on its head," Kumar said, noting that even non-wage earners like auto drivers are entering the market through "choti SIPs" (small-ticket systematic investment plans) starting at just Rs 250.
More Women Are Investing
This demographic shift also includes a significant rise in women investors, whose unique numbers have surged 30% in a single year to surpass the 10-million mark, as more Indian women are beginning to take independent financial decisions.
This influx of millions of digital-native investors has forced a radical overhaul of the industry's backbone. CAMS, which manages 68% of the assets in India's mutual fund sector that is worth Rs 80 lakh crore ($960 billion), now processes 90% of its transactions digitally. To accommodate users who expect the speed of a "10-minute grocery delivery," the firm has deployed AI-driven face-matching for instant KYCs and maintains 1.2 petabytes of data across four geographically separated data centres.
Kumar also highlighted that the new investors are much more patient than their previous generations. “Markets did go down about 15-16% in the last one and a half years. But even at the bottom of the market, there was reason for investors to pull out, but domestic investors did not pull out. You did not see months when either gross SIP count or SIP collection went south. New SIPs continued to come in,” Kumar said.
Kumar noted that this new era of investor patience was supported by a steady diet of digital financial content.
What Next?
Beyond simple investing, CAMS is now enabling a massive new credit ecosystem: loans against mutual funds. While Indian individuals hold nearly 50 lakh crore in mutual fund assets, less than 2% of that value has been leveraged for credit. By providing instant, API-linked lending, the industry aims to allow investors to borrow at 10% interest rates—significantly cheaper than credit cards or personal loans—without liquidating their long-term holdings.
Looking to the future, Kumar sees the industry’s 20% compound annual growth rate as a "long-lasting secular trend." To manage the risk of this ballooning ecosystem, CAMS is using AI bots to monitor for fraud and the "CAMS Lens" to automate the reading of complex regulatory circulars. As 2026 begins, the focus remains on maintaining a nearly "fraud-free" environment where T+1 redemptions ensure that a sell order at 3:00 pm results in cash in the bank by the next morning.
