LIC Mutual Fund is planning to launch its first Specialised Investment Fund (SIF) by October, targeting an initial mobilisation of ₹500 crore from high-net-worth investors (HNIs).

“We have applied to the Securities and Exchange Board of India (SEBI). Once approval comes, then we will be able to launch the fund,” LIC Mutual Fund MD & CEO Ravi Kumar Jha told reporters in Chennai on Monday.

SIF is an investment product regulated by SEBI that sits between traditional mutual funds and portfolio management services (PMS), offering fund managers greater flexibility to implement investment strategies while operating under a defined regulatory framework.

Asked about the timeline, Jha said, “October I can say,” even as he added that the launch would ultimately depend on when the market regulator grants approval and the prevailing market conditions.

Confirming the initial target of ₹500 crores; he said the SIF category is designed for affluent investors, allowing wealthy customers to invest in mutual fund schemes with a minimum ticket size of ₹10 lakh.

Mr. Jha said SIF offers a lower entry threshold than PMS, which require a minimum investment of ₹50 lakh; while offering mutual fund taxation benefits. The company has already begun operational preparations for the launch, with employees undergoing the required certification process.

The proposed launch comes as LIC Mutual Fund crossed the ₹50,000-crore assets under management (AUM) milestone.

The fund house’s AUM stood at ₹50,875 crore as of July 31, 2026, compared with ₹16,526 crore in April 2023, representing a 208% growth over the past three years, he said, targeting ₹1 lakh crore AUM by March 31, 2027 despite market volatility.

To achieve that goal, he said LIC Mutual Fund would focus on three key segments: retail investors through systematic investment plans (SIPs), bank distribution partnerships and corporate and institutional clients.

Kumar also said the company is not planning to launch any new equity-oriented funds immediately.

“This year we are not very keen to issue any NFO because we are seeing that the equity market is not so positive. It is not giving a very positive signal right now,” he said, adding that fresh launches could be considered in the second half of the financial year depending on market conditions.

At a time when foreign investors have been pulling money out of the Indian stock market, domestic investors have kept it afloat with their steady contributions. Data show that this trend has persisted for some time now. But who are these domestic investors, especially those putting their money into mutual funds?

Data show that urban Indian men continue to dominate the domestic investor market. However, in recent years, the share of those from smaller towns and non-metro areas has steadily increased. Also, one in four of these investors is a woman.

Foreign Portfolio Investors are those who invest in the stocks and shares of another country — in this case, India. On the other hand, Domestic Institutional Investors are investment bodies within India, such as mutual funds, insurance companies, banks, and pension funds, that channel money into the domestic financial market. Among them, mutual funds form a major category, pooling money from shareholders and investing it across different securities.

FPI ownership in NSE-listed companies has fallen to a 13.5-year low, while the share of Domestic Mutual Funds (DMFs) has climbed to a record high. Despite the decline, FPIs still held a higher share — 17.3% — compared with 10.3% for DMFs. So, while self-reliance through domestic investors is on the rise, the role of FPIs remains crucial.

DMFs are largely powered by Systematic Investment Plans (SIPs). These plans allow investors to put in a fixed amount of money at regular intervals — sometimes as little as ₹1,000 every month — without having to worry about when to enter or exit the market. The number of new SIP accounts surged from 14.1 million in 2020-21 to 68 million in 2024-25. Over the same period, assets under management (AUM) through SIPs grew from ₹4.27 trillion to ₹13.35 trillion.

Consequently, while a significant share of households still relies on traditional savings tools such as bank deposits, life insurance funds, and public provident funds, the proportion investing in mutual funds has been steadily rising. The share of mutual funds in households’ gross financial savings grew from 0.9% in 2011–12 to 6% in 2022–23.

An RBI study concluded that access to the market — measured by the number of demat accounts — is the most influential factor in shaping people’s willingness to invest in mutual funds. In other words, simply having the means to invest is often enough for people to begin. Other crucial determinants include low fixed deposit rates and a supportive business environment.

The number of demat accounts across India rose by 200% between 2020 and 2024, increasing from 3.8 crore to 11.8 crore. Every State/Union Territory recorded at least a 100% jump. In Bihar, the number of accounts grew by over 400% — from about 9.6 lakh to 50 lakh — while in Uttar Pradesh they climbed 348%, from 0.2 crore to 1.3 crore.

Investor participation is also no longer concentrated in metros. In September 2015, more than 80% of mutual fund AUM came from just eight cities — Mumbai, Delhi, Bengaluru, Chennai, Kolkata, Ahmedabad, Pune, and Hyderabad. By March 2025, this share had dropped to 60%.

Also, investors are not just men. Data shows that one in four investors is a woman. As of FY25, close to 25% of individual investors are women. This has been the case since at least FY16.

Source: National Stock Exchange’s “India Ownership Tracker”, Reserve Bank of India, the Centre for Monitoring Indian Economy, Ministry of Statisticts and Programme Implememntation

devyanshi.b@thehindu.co.in

vignesh.r@thehindu.co.in