New Delhi: Mutual fund exposure in non-banking financial companies (NBFCs) witnessed a significant year-on-year surge of 32.5%, reaching ₹2.77 lakh crore in May 2025, as per a recent report by CareEdge Ratings. This jump was primarily fueled by sustained investments in commercial papers (CPs) and corporate debt instruments, which have remained above ₹2 lakh crore for 14 consecutive months. This surpasses the previous highs of ₹2.69 lakh crore in April 2025 and ₹2.64 lakh crore in July 2018.
Despite this growth, the share of NBFC credit in total bank credit declined from 9.3% in May 2024 to 8.5% in May 2025, indicating a shift in credit distribution patterns.
Meanwhile, the mutual fund industry’s total assets under management (AUM) rose to ₹72.2 lakh crore in May from ₹70 lakh crore in April, with net inflows of ₹29,108 crore. Notably, 65% of the inflows came from equity mutual funds, which saw AUM rise 4.83% to ₹32.05 lakh crore, backed by continued market optimism and mark-to-market gains.
Flexi cap funds led the equity category with ₹3,841 crore in inflows for the third month in a row. Hybrid and arbitrage funds also saw robust inflows, while passive funds extended their 55-month inflow streak. Gold ETFs saw renewed interest amid geopolitical tensions and rate-cut expectations.
Mutual fund exposure to non-banking financial companies (NBFCs) rose sharply by 32.5% year-on-year, touching ₹2.77 lakh crore in May 2025, as per a CareEdge Ratings report. The spike was led by consistent demand for commercial papers (CPs) and corporate debt, which have held above ₹2 lakh crore for 14 months in a row. This marks a new milestone, exceeding previous records of ₹2.69 lakh crore (April 2025) and ₹2.64 lakh crore (July 2018).
Interestingly, while mutual fund exposure surged, the NBFC share in overall bank credit slipped to 8.5% in May 2025, down from 9.3% in May 2024, suggesting a recalibration in credit market dynamics.
The broader mutual fund industry recorded AUM growth from ₹70 lakh crore in April to ₹72.2 lakh crore in May, buoyed by ₹29,108 crore in net inflows. Equity funds dominated with 65% of inflows, increasing AUM to ₹32.05 lakh crore — a 4.83% rise.
Flexi cap funds led with ₹3,841 crore in inflows, maintaining momentum for the third month. Hybrid fund assets also jumped 4.43% to ₹9.55 lakh crore, with arbitrage funds alone attracting ₹15,702 crore. Passive funds continued their inflow streak (55 months), and gold ETFs regained investor interest amid rising global uncertainties.
