Debt Mutual Funds See Robust Rebound with ₹2.19 Lakh Crore Inflows in April

Industry AUM Hits ₹70 Lakh Crore as Investor Confidence Returns​

New Delhi, May 12 — Debt-oriented mutual funds made a strong comeback in April with net inflows reaching ₹2.19 lakh crore, marking a sharp reversal from the outflows recorded over the previous two months, according to the latest data from the Association of Mutual Funds in India (AMFI).

This recovery follows significant redemptions of ₹2.02 lakh crore in March, largely attributed to year-end withdrawals by institutional investors for advance tax payments and balance sheet rebalancing, said Nehal Meshram, Senior Analyst at Morningstar Investment Research India. In contrast, February also witnessed a smaller outflow of ₹6,525 crore, while January had posted a robust inflow of ₹1.28 lakh crore.

The influx in April boosted the assets under management (AUM) of debt mutual funds to ₹17.57 lakh crore, up from ₹17.02 lakh crore in March. Investor participation also increased, with the number of folios rising by 1.44 lakh to 79.36 lakh from 68.91 lakh.

Broad-Based Inflows Across Categories​

The rebound was broad-based, as 12 of the 16 debt fund categories recorded net inflows. Liquid funds led the recovery, garnering ₹1.18 lakh crore and reversing nearly 89% of March's outflows.

“This surge in inflows reflects a return to normalcy and renewed confidence in fixed income investments, especially from corporates redeploying idle funds after year-end commitments,” said Meshram.

Ankur Punj, MD and National Head at Equirus Wealth, noted that investors favored short-duration instruments. “A significant share of debt allocations went into liquid and liquid-plus strategies, indicating a short-term parking approach as investors await better deployment opportunities,” Punj said.

Gains in Short-Term Instruments​

• Overnight Funds: Attracted ₹23,900 crore
• Money Market Funds: Pulled in ₹31,507 crore
• Ultra Short Duration Funds: Received ₹26,734 crore
• Low Duration Funds: Saw inflows of ₹9,371 crore

These figures suggest a growing investor appetite for short-term strategies offering attractive risk-adjusted returns amid stable monetary policy and ample liquidity.

Select Categories Still See Outflows​

Despite the overall optimism, some categories witnessed continued redemptions:

• Gilt Funds: ₹425 crore outflow
• Credit Risk Funds: ₹302 crore outflow
• Gilt with 10-Year Constant Duration: ₹39 crore outflow
• Dynamic Bond Funds: ₹10 crore outflow

Industry-Wide Surge to ₹70 Lakh Crore​

The mutual fund industry as a whole saw net inflows of ₹2.77 lakh crore in April, following ₹1.64 lakh crore in outflows in March. This pushed the total AUM of the Indian mutual fund industry to a historic high of ₹70 lakh crore as of April-end, compared to ₹65.74 lakh crore in March.