Listed companies park record ₹3.8 trillion in mutual funds

Cash buildup, limited capex appetite push firms towards fund houses

- SACHIN P MAMPATTA

Listed companies have deployed more money in mutual funds (MFs) than at any time on record.

Their MF investments touched ₹3.8 trillion in 2024-25 (FY25), according to data from the Centre for Monitoring Indian Economy (CMIE). This is the highest in data going back to 1990-91. The analysis looked at 1,569 non-finance companies with available data for FY25. The record high is despite it being a partial sample. The full sample for the previous year had 3,867 companies.

Uncertainty, limited growth avenues, and lower interest rates are said to have been factors contributing to the increase.

The value of MF investments last hit a high in 2020-21 when it touched ₹3.6 trillion. The numbers were lower in subsequent years before hitting a new high in FY25.

Many companies are generating large amounts of cash at a time when there may not necessarily be many business avenues for large capital allocation, observed Trust MF Chief Executive Officer Sandeep Bagla. The resultant surplus may be finding its way into alternative avenues.