Net inflows into equity mutual funds rose 56% month-on-month to Rs 40,450 crore in March, the highest since July 2025, according to data from the Association of Mutual Funds in India (AMFI). Systematic investment plan (SIP) contributions hit a record Rs 32,087 crore.
Data released by the Association of Mutual Funds in India (AMFI) shows net inflows into equity-focused mutual funds surged 56% from the previous month to Rs 40,450 crore in March, marking the highest level since July 2025. Flexi-cap funds led with a 45% jump to Rs 10,054 crore, while mid-cap and small-cap inflows rose 51% to Rs 6,063 crore and 61% to Rs 6,263.56 crore, respectively.
Debt funds recorded outflows of Rs 2.95 lakh crore, leading to overall industry net outflows of Rs 2.40 lakh crore, compared to inflows of Rs 94,530 crore in February. Equity mutual funds' average assets under management (AUM) dropped below Rs 32 lakh crore from Rs 35.6 lakh crore, amid a sharp market correction. The benchmark Sensex fell over 11% in March, impacted by West Asia conflict and elevated crude oil prices.
"While the headline numbers for March 2026, a net outflow of Rs 2,39,910 crore and AUM declining…may spook investors, both are misleading in isolation," said Nitin Agrawal, CEO of mutual funds at InCred Money. "The AUM decline is a mark-to-market story driven by a sharp equity market correction during the month, not a confidence story. The net outflow is almost entirely driven by debt fund redemptions, which is a well-established quarter-end phenomenon in March."
Agrawal added that flexi-cap's lead highlights diversification needs amid volatility, with mid- and small-cap gains signaling value-buying opportunities. Gold ETF inflows cooled to Rs 2,266 crore from Rs 5,255 crore in February, after January's peak of Rs 24,040 crore. Index funds saw inflows nearly triple to Rs 8,169 crore.
Investors are cyclically shifting to equity ETFs, said Kunal Rambhia, fund manager at The Streets.
