BIMARU states can no longer be considered as bimar (sick), if the strong growth in mutual fund industry’s asset under management from these states are anything to go by.
BIMARU is a term coined in the 1980s by demographer Ashish Bose to describe the poor economic conditions in Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. The mutual fund AUM in these four states have grown higher than that of the industry in the last one year.
In fact, Uttar Pradesh, with an AUM of ₹3.19 lakh crore, has overtaken Tamil Nadu’s asset of ₹3.09 lakh crore to capture sixth position in the overall ranking.
Sriram BKR, Senior Investment Strategist, Geojit Financial Services, said among top-10 states in terms of AUM, Gujarat, UP and Telangana have moved one step ahead to third, sixth and tenth in the ranking table.
Besides the growing wealth in smaller towns, he said the mutual fund industry has done well to focus beyond top 30 cities for bringing fresh investments.
In last one year ended November, the mutual fund asset in Madhya Pradesh and Bihar were up 35 per cent and 40 per cent to ₹1.04 lakh crore and ₹67,895 crore while that of Rajasthan jumped 36 per cent to ₹1.27 lakh crore, according to Geojit Insights.
The MF industry AUM jumped 33 per cent to ₹68.04 lakh crore in last one year.
With the presence of top corporates and high networth investors, Maharashtra topped the table with asset of ₹27.70 lakh crore and was way ahead of second placed New Delhi with ₹5.59 lakh crore.
In 2012, SEBI gave special incentives for mutual funds to attract investment from smaller cities. However, it was suspended last March due to a few irregularities. Systematic Investment Plan has been one of the major draw in driving inflows from beyond top-30 (B-30) cities.
According to the industry, over 50 per cent of live SIP accounts are from semi-urban and rural areas. The individual distributor count in B-30 has also grown at a faster pace than in T-30 in the past few years. This apart, the number of individual distributors and direct investors count has also been growing faster than big cities.
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Ashwin Gupta, CEO, Wealth Advisors, said investors in small towns get excited whenever equity markets deliver good returns consistently for longer period.
“The online distribution channels have also helped MFs to reach nook and corner of the country. The number of SIP accounts in B-30 cities at 54.7 million are much higher than the top 30 cities count of 46.5 million,” he added.
