UTI Asset Management Company Ltd Management Discussions

GLOBAL MACROECONOMIC SCENARIO

Global economy projected to grow at —3-3.5% in CY 2026

As per the International Monetary Fund (IMF) (World Economic Outlook — April 2026 outlook), global gross domestic product (GDP) is projected to grow at 3.1% and 3.2% in Calendar Year (CY) 2026 and CY 2027 respectively as compared to 3.3% and 3.2% projected in January 2026 for CY 2026 and CY 2027 respectively. Global growth numbers have been revised on account of the ongoing conflict in the Middle East, volatility in US tariffs, and high level of policy uncertainty intensifying downside risks. Global inflation is projected to increase to 4.4% in CY 2026 followed by a decline to 3.7% in CY 2027. Furthermore, the risk of inflation remains significant going forward due to the US tariffs escalation and geopolitical uncertainty in West Asia.

US GDP grew at an annualised rate of 0.7% in the fourth quarter of CY 2025 on account of increase in consumer and investment expenditure, offset by decrease in government spending and exports. GDP growth in the euro area slowed to 0.2% in the fourth quarter of 2025 from 0.3% in the previous quarter. The UK economy remained stable at 0.1 % growth in the fourth quarter of 2025, unchanged from the third quarter of 2025. Chinas economy grew 5% year-on-year in the first quarter of 2026, in line with the growth in the fourth quarter of 2025. China has targeted an annual growth rate of 4.5-5% in 2026, in line with what was targeted in the previous year. However, given the escalation of geopolitical tensions in West Asia and the associated volatility in energy markets, along with a persistent global policy uncertainty, the achievement of these targets remains a key monitorable.

Global economies continued to be buffeted by uncertainties due to escalating geopolitical tensions, particularly the West Asia crisis

Global economic conditions through CY 2025, with further escalation in early 2026 were increasingly influenced by geopolitical developments, with tensions in West Asia emerging as a key source of uncertainty. While trade-related disruptions across major economies continued to impact global trade and investment flows, developments in West Asia had a direct bearing on energy markets and supply chains. The escalation of tensions during the year resulted in heightened risks to global energy supply, including disruptions to critical infrastructure and key transit routes. During the peak phase of the West Asia supply disruption in March 2026, an estimated —20 mn barrels per day of seaborne oil flows were impacted, contributing to a sharp increase in crude oil prices, with Brent crude rising by nearly 50% to a peak at —US$1 20/bbl. These developments have increased concerns around the stability and continuity of energy supplies, contributing further to the elevated volatility in energy markets. In addition to near-term supply disruptions, the situation has also created uncertainty around longer-term supply conditions, particularly in the context of infrastructure availability and investment flows in the region. Together, the West Asia energy crisis and the USA trade policy disruption represent the two defining macro risks shaping the global economic outlook for FY 2027.

As per IMF, global headline inflation is expected to increase to 4.4% in CY 2026 and to 3.7% in CY 2027

In the US, consumer price inflation rose sharply in April 2026 to 3.8%. The surge was driven predominantly by energy prices jumping 1 7.9% year-on-year. The US Federal Reserve maintained its funds target rate at 3.50-3.75% in its April 2026 meeting, citing the implications of developments in the Middle East for the US economy being uncertain.

Inflation in the euro area is expected to climb to 3.0% in April 2026, up from 2.6% in March 2026, owing to energy prices increase, driven by the Middle East conflict. The European Central Bank kept all the three key rates unchanged at its April 2026 meeting - the deposit facility rate at 2.0%, the main refinancing rate at 2.15%, and the marginal lending facility at 2.4% - marking the seventh consecutive hold following eight consecutive cuts from June 2024 to June 2025.

In the UK, inflation increased to 3.3% in March 2026, driven primarily by higher energy prices, with motor fuels making the largest upward contribution. In its April 2026 meeting, the Bank of England held interest rates at 3.75%, highlighting the need to adopt a gradual and careful approach amid recent developments in West Asia crisis and financial market volatility.

Inflation in Japan rose to 1 .5% in March 2026, owing to increase in transport costs and household items, amid the effects of the Middle East tensions. The Bank of Japan maintained its policy rate at 0.75% following its March 2026 meeting, anticipating that inflation would gradually align with its target levels during 2026 amid evolving domestic and global economic conditions. The Peoples Bank of China maintained the one-year loan prime rate at 3.0% in its March 2026 meeting.

INDIAS MACROECONOMIC SCENARIO

India continues to maintain its position as fastest growing major economy in the world India delivered a robust performance in Financial Year (FY) 2026, with an estimated real GDP growth of 7.6% under the revised national accounts series. Growth was primarily driven by strong domestic demand, supported by robust private consumption and sustained recovery in investment activity. Services remained a key growth engine, while manufacturing gained momentum, supported by improving capacity utilisation and policy-led capital expenditure.

India is expected to remain the fastest-growing major economy globally, anchored by domestic demand even as global headwinds intensify. As per the Reserve Bank of India (RBI) June 2026 Monetary Policy Committee (MPC) meeting, the economy is projected to moderate to 6.6% in FY 2027, while the IMF projected growth at 6.5% for FY 2027.

The global economic landscape is expected to be challenging this year, with the West Asia conflict likely to dampen demand and impact Indias exports. Domestically, Indias GDP growth is expected to moderate in FY 2027, facing headwinds from higher crude oil prices, as well as a forecasted below-normal monsoon. Furthermore, global supply chain disruptions are intensifying cost pressures, and reduced input availability is likely to add to the strain, posing additional challenges to growth.

RBI continues to maintain status quo

The RBI, in its June 2026 MPC meeting, kept the policy repo rate unchanged at 5.25%, and maintained a neutral policy stance. This decision reflects a data-driven approach, as the MPC continues to monitor risks on inflation and growth that are yet to materialise significantly. Nevertheless, the MPC remains cautious about the impact of rising prices on inflation expectations, which could lead to a broader generalisation of inflationary pressures in the economy.

Consumer Price Index (CPI) inflation to average at 5.1% in FY 2027

The RBI projects CPI inflation to average 5.1 % in FY 2027. According to the MPC, the inflation forecast for the quarters is as follows: 4.2% in Q1,5.1 % in Q2, 5.9% in Q3, and 5.4% in Q4. The revision is based on expectations of pressure from higher retail transport fuel prices and increasing pass-through of broader cost pressures by producers. Additionally, the potential impact of a below-normal monsoon on agricultural production remains a risk. However, adequate food stocks and reservoir levels are expected to provide some comfort in this regard. The RBI also projects core inflation for FY 2027 to be 4.7%, 30 bps higher than the previous projection.

The rupee has exhibited significant movement in recent months, particularly during periods of heightened global volatility. In response, the RBI has adopted certain non-interest rate measures to attract foreign capital flows and support the currency. These measures include increasing access for Foreign Portfolio Investors (FPIs) to longer-tenor (15, 30, and 40-year) government securities, raising investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) without requiring SEBI registration, and others. While these measures are expected to improve sentiment and support the rupee, heightened global uncertainties remain a risk to capital flows in the short term.

GLOBAL MUTUAL FUND INDUSTRY

Emerging markets with strong fundamentals are expected to drive growth in global mutual fund in 2026

The global mutual fund industry demonstrated steady growth in 2025 despite persistent macroeconomic and geopolitical challenges, supported by strong investor inflows, diversification benefits, and increasing role of regulated investment vehicles. The global mutual fund Assets Under Management (AUM) reported a growth rate of ~ 1 9% in 2025. A notable trend during the year was the continued shift towards passive investing, with Index Funds and Exchange Traded Funds (ETFs) gaining significant traction due to their cost efficiency, transparency, and scalability. In fact, assets in indexed strategies have now surpassed actively managed funds globally, making a structural shift in investor preference.

The global mutual fund industry continues to demonstrate resilience, with the AUM-to-GDP ratio improving from 66.2% in 2024 to 74.4% in 2025, indicating deeper financialisation and increased investor participation. This ratio is expected to improve further in 2026, supported by sustained inflows and continued growth in passive investment vehicles such as ETFs. However, the near-term outlook remains cautious amid geopolitical uncertainties, recessionary concerns, and evolving investor preferences. Despite these challenges, emerging markets with strong fundamentals and rising retail participation are expected to offer meaningful growth opportunities for the industry.

Indias AUM-to-GDP ratio at ~21% as of March 2026 is far below global levels; but witnessed significant growth in the last 5 years driven by increased retail participation and improved accessibility

Indias mutual fund industry experienced significant growth over the past few years which has led to rise in Indias AUM-to-GDP ratio from 1 5.8% as of FY 2021 to 21 .3% as of FY 2026. Notably, mutual fund AUM has grown at a Compounded Annualised Growth Rate (CAGR) of ~1 9% over FY 2021 -26, significantly outpacing nominal GDP growth of ~1 0-1 2% during the same period, reflecting the increase financial intermediation of savings. The rise in AUM-to-GDP ratio is being driven by a combination of economic, regulatory, and behavioural factors. This includes rising retail participation, improved accessibility, financial awareness, and ease of investing. In addition, FY 2026 witnessed increased inflows into passive funds and Systematic Investment Plan (SIP) contributions reaching record highs, alongside continued regulatory push towards transparency and investor protection, further supporting industry growth.

Despite the strong growth in recent years, Indias mutual fund penetration (MF AUM-to-GDP ratio) remains below that of several global peers, indicating meaningful headroom for expansion. This gap is increasingly being addressed by structural shifts in the savings ecosystem, including higher share of financial assets in household savings portfolios, sustained retail participation though SIPs, and deeper digital penetration across distribution channels.

The industry is also benefiting from improving income levels, favourable demographics, and increasing formalisation of the economy, which are gradually broadening the investor base. As these structural tailwinds continue to play out, mutual funds are expected to witness a steady increase in penetration levels over the medium term, supported by enhanced accessibility, product innovation, and growing investor engagement.

INDIAN MUTUAL FUND INDUSTRY

Indian mutual fund AUM registered strong 20.9% year-on-year growth in FY 2026

The Indian mutual fund industry has witnessed robust growth in recent years, and FY 2026 further reinforced this upward trajectory. Several structural, regulatory, and economic factors have collectively contributed to this expansion, supported by strong investor participation and technological transformation. Indias mutual fund Quarterly Average Asset Under Management (QAAUM) increased from Rs. 32,1 0,593 crore as of March 2021 to Rs. 81,53,966 crore as of March 2026, registering a strong CAGR of 20.5% during the period. The industry has witnessed a robust 24.6% and 20.9% year-on-year growth as of March 2025 and March 2026 respectively. The growth in overall mutual fund AUM was led by equity-oriented funds and ETFs. Equity funds AUM grew by 20% year-on-year as of March 2025 to March 2026 whereas ETFs AUM increased by 40% yea r-on-year during the same period.

FY 2026 was one of the strongest years for AUM growth, supported by structural drivers such as rising retail participation (particularly through SIPs), increasing digital accessibility and fintech-led distribution, which expanded investor access to mutual funds. However, growth moderated in the latter part of the year due to heightened market volatility, driven by the escalation of geopolitical tensions in West Asia, which led to subdued market performance and weaker net inflows during the affected quarter, ultimately resulting in limited sequential growth. Consequently, despite robust traction in the earlier part of the year, overall, AUM expansion moderated with annual growth estimated at —20%, marking the lowest growth rate in the past three years. Nonetheless, underlying structural drivers including favourable demographics such as young aspirational population, rising disposable incomes, and continued financialisation of household savings-remain intact, supporting the medium to long-term growth outlook for the mutual fund industry.

Number of folios reached 27.4 crore as of 31 st March 2026

The number of mutual fund folios in India has witnessed a remarkable surge in recent years, growing at a 5-year CAGR of 22.8% from 9.8 crore as of 31 st March 2021 to 27.4 crore as of 31 sl March 2026. This positive trend reflects growing investor interest and participation. Increased awareness, understanding of mutual fund products among investors and enhanced distribution channels, especially in smaller cities referred to as Beyond 30 (B30) cities, have contributed to this rise of folio counts.

Share of equity funds AUM in overall mutual fund AUM continues to remain stable at 60% as of March 2026

The share of equity funds in Indias total mutual fund AUM has remained broadly stable at —60% as of March 2026, after witnessing a significant increase in preceding years from —42% in March 2021 to —60% in March 2025. While equity AUM continued to grow in absolute terms, its share remained largely unchanged during FY 2026. This stability reflects a relatively balanced growth across asset classes. The share of debt and liquid funds stood —1 3% each as of March 2026, reflecting evolving investor preferences, withdrawal of certain tax benefits, and liquidity considerations. Meanwhile, share of ETFs in overall AUM increased from —9% in March 2021 to — 1 4% in March 2026, with a marginal uptick during FY 2026 driven by continued growth in passive AUM, rising retail participation, cost efficiency, and diversification benefits.

Net flows in mutual funds moderated in FY 2026, despite strong tractions in ETFs

The mutual fund industry witnessed strong inflows in FY 2026, with total net inflows of Rs. 7,36,021 crore, although lower compared to Rs. 8,15,115 crore recorded in FY 2025. Equity mutual funds continued to account for a significant share of inflows at Rs. 5,30,533 crore, albeit declining from Rs. 5,99,275 crore in the FY 2025 reflecting some moderation amid market volatility. Inflows in ETFs emerged as a key highlight, witnessing a sharp increase to Rs. 1,81,125 crore in FY 2026 from Rs. 83,079 crore in FY 2025, indicating growing investor preference for passive investment strategies and institutional participation. In contrast, debt mutual funds recorded net outflows of Rs. 33,634 crore during FY 2026 reversing the net inflows of Rs. 38,654 crore seen in FY 2025, amid shifting interest rate expectations and liquidity dynamics. Liquid and money market funds saw moderate inflows at Rs. 57,997 crore in FY 2026 compared to Rs. 94,107 crore in FY 2025, reflecting changing treasury allocations and evolving market conditions. Overall, while aggregate inflows (Rs. 7,36,021 crore) softened on a year-on-year basis, the underlying trend highlights a shift in investor preference towards passive products and selective asset allocation strategies.

Quarterly Inflows as per new classification of mutual funds scheme from March 2021 to March 2026

(In Rs. crore)

Quarter ended	Equity	Debt	Hybrid Schemes	Solution Oriented	Others	Total
Mar-21	(11,707)	(83,754)	13,055	1,102	20,063	(61,241)
Jun-21	15,627	6,293	27,220	222	20,262	69,624
Sep-21	35,256	(10,542)	41,775	189	33,296	99,974
Dec-21	40,761	(21,834)	20,423	390	40,489	80,229
Mar-22	62,450	(1,16,601)	5,803	464	44,787	(3,097)
Jun-22	48,797	(1,05,055)	1 0,084	409	41,226	(4,539)
Sep-22	28,902	(10,567)	(14,436)	417	42,963	47,279
Dec-22	18,758	(16,394)	(7,041)	427	36,053	31,803
Mar-23	48,319	(77,044)	(7,420)	583	37,247	1,685
Jun-23	16,427	1,32,477	14,021	419	13,490	1,76,834
Sep-23	41,496	(70,002)	48,153	479	10,115	30,241
Dec-23	52,412	(36,708)	38,454	748	10,553	65,459
Mar-24	71,027	(60,354)	44,326	638	26,532	82,169
Jun-24	94,132	1,22,614	46,708	896	41,762	3,06,112
Sep-24	1,09,688	50,705	32,342	687	32,631	2,26,053
Dec-24	1,18,929	43,231	25,357	979	31,274	2,19,770
Mar-25	93,928	(80,756)	14,625	730	34,653	63,180
Jun-25	66,816	1,99,636	58,235	590	29,753	3,55,030
Sep-25	1,06,495	(3,616)	45,570	889	38,753	1,88,091
Dec-25	82,600	1,307	38,211	926	58,777	1,81,821
Mar-26	90,344	(1,77,513)	12,801	845	84,602	11,079

Notes: As per net inflows during quarterly AUM. Open-ended / close-ended and interval funds have been considered. Others include gold ETFs / other ETFs, index funds and funds of funds investing overseas.

Source: AMFI, CRISIL Intelligence

Maharashtra has the highest share in total mutual fund AUM in India as of March 2026

As of March 2026, top 5 states having majority share of Indian mutual fund AAUM (Average Asset Under Management) are Maharashtra, New Delhi, Karnataka, Gujarat and West Bengal. Maharashtra has the highest share at 40.1 % of the total mutual fund AUM (down from 40.6% as of March 2025) of the country with a total of Rs. 31,86,953 crore AUM, followed by New Delhi at 8.8% with a total of Rs. 7,02,583 crore AUM, Karnataka at 6.9% with Rs. 5,49,836 crore AUM, Gujarat at 6.8% with 5,43,1 97 crore AUM and West Bengal at 4.8% with Rs. 3,83,1 90 crore AUM. Together, these states hold a massive 67.5% (down from 67.8% as of March 2025) of the total mutual funds AUM of the country which amounts to Rs. 53,65,758 crore. The states of Maharashtra, New Delhi, Karnataka, Gujarat, West Bengal which include cities such as Mumbai, Pune, Bengaluru, Ahmedabad, Vadodara and Kolkata, etc. continue to serve as major hubs for mutual fund investments driven by factors such as financial prominence (presence of financial hubs, government entities), investor demographics (growth number of retail investors, presence of HNIs, growing investor awareness, greater technological penetration) and historical significance.

MF AUM share of Top 5 states as of March 2026

MF AUM share of Top 5 states as of March 2026

Maharashtra

40.1%

New Delhi

8.8%

Karnataka

6.9%

Gujarat

6.8%

West

Bengal

4.8%

Rest of the country 32.6%

EMERGING TRENDS IN INDIAN MUTUAL FUND INDUSTRY

Passive funds continue to gain traction on account of their increasing popularity

Due to rising popularity and awareness about passive funds coupled with benefit of a lower expense ratio and ease of investment, passive fund AUM in India grew at a 10-year CAGR of 54.1% between March 2016 and March 2026. Further, passive fund AUM grew at a robust 34.2% year-on-year as of March 2026. This has led to the share of passive fund AUM in total AUM to rise from 1 .4% as of March 201 6 to 1 7.8% as of March 2026. Passive funds, particularly ETFs sustained asset growth in FY 2026, buoyed by increasing popularity, diversification benefits and continued participation from retail and institutional investors.

Individual investors continue to increasingly enter the mutual fund space

The share of retail and High Net Worth Individuals (HNI) investors AUM in overall mutual fund industry AUM continued to rise, increasing from 55.0% as of March 2021 to 62.3% as of March 2026. However, the share of retail and HNI investors AUM saw a moderation in March 2026 as compared to —62.8% as of March 2025. However, in absolute terms, AUM attributable to retail investors has continued to grow strongly, registering a CAGR of 21.6% between March 2021 and March 2026, reflecting sustained expansion in individual investor participation. The increasing share of retail investors in mutual funds is being driven by a combination of structural and cyclical factors. Improved financial awareness, greater digital access, and continued product innovation have supported broader investor participation. SIPs remain a key driver, gaining traction due to their affordability, disciplined approach, and ease of automation.

During FY 2026, digital channels continued to play a critical role in expanding the investor base, with seamless onboarding processes and mobile-based investing improving accessibility across geographies, including smaller cities. At the same time, sustained investor education initiatives and improved transparency in disclosures have contributed to stronger investor confidence. However, investor activity during the latter part of the year was impacted by heightened market volatility, which moderated incremental flows. Despite this, the long-term trend of increasing retail participation remains intact, supported by rising financialisation of household savings and a growing preference for market-linked investment avenues.

SIPs continue to be one of the key drivers of retail participation, supported by affordability and disciplined investing behaviour

SIPs have strengthened their position as a primary entry route for retail investors into mutual funds, supported by increasing financialisation of savings, expansion of digital investment platforms, and a wider distributor reach. Their low-ticket size, ease of automation, and ability to enable disciplined and staggered investments have made them particularly attractive for first-time and small-ticket investors. SIPs also help mitigate behavioural biases during volatile market conditions, thereby supporting more stable and consistent inflows overtime.

The number of SIP accounts increased from 3.7 crore as of March 2021 to 10.4 crore as of March 2026, growing at a CAGR of 23.1%. Moreover, the contribution of SIPs during FY 2026 reached Rs. 3,49,589 crore from Rs. 96,080 crore in FY 2021, thereby recording a CAGR of 29.5% during the same period. FY 2026 alone witnessed an exponential year-on-year growth of 20.8% in SIP contribution. The growth in SIP participation during FY 2026 was driven not only by an increase in the number of accounts but also by a rising share of low-value SIPs, reflecting deeper retail penetration beyond traditional investor segments. While overall SIP inflows remained resilient, the pace of growth moderated during the latter part of the year amid heightened market volatility. Nevertheless, sustained investor awareness initiatives, improved digital onboarding, and increasing acceptance of SIPs as a long-term wealth creation tool continue to support their structural growth. As a result, SIP remains a critical contributor to incremental AUM growth and an important stabilising factor for industry inflows.

The total number of outstanding SIP accounts expanded from 3.7 crore in March 2021 to 1 0.4 crore in March 2026, registering a robust CAGR of 23.1% - a near three-fold increase over five years that underscores the structural deepening of retail participation in Indias mutual funds. This sustained momentum, maintained consistently across interest rate cycles and market volatility phases, reflects a fundamental shift in household savings behaviour toward disciplined investing.

Gold ETFs continue to outshine among passive funds as gold prices surge

The AUM of Gold ETFs in India has experienced a significant surge, reflecting growing investor inclination towards gold as a safe- haven asset. Gold ETF AUM witnessed a CAGR of 63.8% between March 2021 and March 2026 to reach Rs. 1,66,972 crore. During FY 2026, Gold ETF AUM rose by 21 6.8% as gold prices reached all-time high. Investors opted for Gold ETFs as a more convenient and cost-effective alternative to buying physical gold. Moreover, economic uncertainties, a downturn in local equities in second half of FY 2026 and low US bond-yields also prompted investors to diversify their portfolios by increasing allocation to Gold ETFs. Recent increase in import duties from 6% to 1 5% is expected to drive the price of gold upwards in the mid-term resulting in a positive impact on Gold ETFs. However, some of the latest initiatives like electronic gold receipts (EGRs) which aim to monetise domestic physical gold may act as a counterbalancing measure.

Silver ETFs witness sharp growth with sequential volatility in flows

Silver ETFs witnessed strong traction during FY 2025 and into FY 2026, with AUM increasing from Rs. 13,954 crore as of March 2025 to Rs. 90,1 24 crore as of March 2026, reflecting a significant rise in investor interest. The growth was particularly pronounced post the

June quarter of FY 2026, with AUM expanding by 54.6% in the September 2025 quarter and further accelerating by 92.4% in the December 2025 quarter on a sequential basis.

The surge in flows into Silver ETFs was driven by two main factors: investors gravitating towards this product amid heightened globa uncertainty, and a general rising interest in silver as a diversification asset and a commodity to explore beyond gold. At the same time, quarter-on-quarter flows remained volatile, reflecting the tactical nature of investor participation in silver as an asset class.

Hybrid mutual fund schemes emerge as one of the preferred choices for balanced, goal-oriented wealth creation

Investor preference for hybrid mutual fund schemes has continued to strengthen, driven by their balanced risk-return profile, particularly in the context of goal-based investing. Hybrid funds allocate across equity and debt instruments, enabling participation in equity market upside while providing relative stability during periods of volatility. This positioning has made them increasingly relevant for investors seeking moderate risk exposure compared to pure equity strategies. Hybrid mutual funds registered a year-on-year AUM growth of 27% in FY 2026, reaching Rs.1 1,76,21 2 crore as of March 2026. The growth momentum during FY 2026 was supported by increased investor allocation towards relatively balanced strategies amid heightened market volatility and global geopolitical uncertainties.

The debt allocation within hybrid portfolios provided a cushion against market corrections, helping mitigate portfolio drawdowns. In addition, hybrid solutions have seen increased adoption among investors with medium- to long-term financial objectives, including retirement planning and wealth accumulation, given their relatively stable return profile across market cycles. Going forward, the continued shift towards goal-based investing, coupled with a preference for diversified asset allocation strategies is expected to sustain demand for hybrid offerings.

Popularity of direct plans continues to remain high among institutional investors

As of March 2026, direct plans accounted for 78% of the monthly average AUM of institutional investor (up from 75% on March 2021), whereas for individual investors this figure was 30% (up from 20% as of March 2021). The sustained popularity of direct plans among individual investors can be attributed to lower expense ratios, various campaigns and investor education initiatives undertaken by the mutual fund industry, along with the increasing adoption of digital investment platforms (such as online investment apps and aggregators) that have made direct investing more accessible and convenient.

Regular and direct plans split for individual and institutional investors AUM

(In Rs. cr.)	Mar-21				Mar-26
	Regular plans	Direct plans	Total	Mix of direct plan in total AUM	Regular plans	Direct plans	Total	Mix of direct plan in total AUM
Individual investors	13,79,919	3,47,047	17,26,967	20.1% 33,30,437		14,09,447	47,39,885	29.7%
Institutional investors	3,76,966	11,13,261	14,90,228	74.7% 7,10,823		24,95,319	32,06,142	77.8%
Total	17,56,886	14,60,309	32,17,194	45.4% 40/41,261		39,04,766	79,46,027	49.1%

Note: Based on monthly average AUM.

Source: AMFI, CRISIS Intelligence

Diverse distribution channels driven by technological advancements continue to scale

The distribution ecosystem for mutual funds in India continued to evolve during FY 2026, with digital channels gaining further traction alongside traditional networks. While physical distribution through banks and intermediaries remains relevant, incremental growth in investor participation is increasingly being driven by platform-led and technology-enabled channels, reflecting changing investor behaviour and preference for convenience-led investing.

• Digital platforms and ecosystem integration: Mobile-first platforms and fintech-led interfaces continued to drive incremental investor additions during the year, supported by simplified onboarding processes, seamless SIP execution, and improved user experience. The integration of mutual fund offerings within broader digital ecosystems has further aided reach, particularly in underpenetrated markets, although investor activity remained sensitive to market volatility in the latter part of the year.

• Increasing use of data and Al in investor engagement: Asset Management Companies (AMCs) and distributors have stepped up the use of data analytics and Al-led tools to enhance investor engagement, including personalised communication, recommendation engines, and automated servicing interfaces. These tools are increasingly being deployed to improve investor retention and engagement rather than purely for acquisition.

• Emergence of assisted-digital distribution models: FY 2026 also saw wider adoption of assisted-digital channels, with platforms such as WhatsApp being used for investor communication, transaction support, and servicing. At the same time, traditional distributors continued to strengthen their digital capabilities, resulting in a more integrated distribution model that combines digital efficiency with advisory-led engagement.

• Banks and Non-Banking Financial Companies (NBFCs) going digital: Traditional distributors, including banks and NBFCs are accelerating their digital transformation by enhancing online investment platforms and mobile applications. This has led to the emergence of a hybrid distribution model that combines the trust of traditional channels with the efficiency and convenience of digital interfaces.

• Online broking platforms: Stockbroking platforms continue to expand their mutual fund offerings by integrating investment options within their trading ecosystems. These platforms are increasingly being used by equity investors seeking diversification into mutual funds through a single, unified interface.

REGULATORY CHANGES IN INDIAN MUTUAL FUND INDUSTRY Revised cut-off timings for overnight mutual fund schemes

In April 2025, the Securities and Exchange Board of India (SEBI) revised the cut-off timings for determining applicable NAV for repurchase/redemption transactions in overnight mutual fund schemes, effective from 1 st June 2025. Under the revised framework, online transactions in overnight fund schemes will now be eligible for a 7:00 PM cut-off, compared with earlier 3:00 PM timeline. The revised framework was introduced to align overnight mutual fund transaction timelines with SEBIs upstreaming mechanism for client funds. The enhanced cut-off timing is expected to improve operational efficiency and liquidity management by enabling more effective deployment of surplus funds into overnight schemes, while ensuring smoother settlement processes across market participants.

Uniform timelines for rebalancing in case of passive breaches

In June 2025, SEBI introduced a uniform framework for rebalancing portfolios in cases of passive breaches, effective immediately upon issuance. Passive breaches refer to deviations from the prescribed asset allocation limits of a mutual fund scheme arising due to factors beyond the control of AMCs, such as market movements, corporate actions, or large investor subscriptions/redemptions. Under the revised framework, all such passive breaches are required to be corrected within a standardised timeline of 30 business days. This replaces the earlier practice where rebalancing timelines varied across AMCs, leading to inconsistencies in implementation. The regulation was introduced to ensure uniformity in compliance, particularly in an environment of heightened market volatility where such breaches have become more frequent. By standardising the rebalancing timeline, SEBI aims to minimise prolonged deviations from mandated asset allocation and strengthen adherence to scheme investment objectives. The impact of this measure is reflected in improved consistency across the industry and enhanced investor protection, as portfolios are realigned within a defined timeframe, reducing the risk of unintended exposure.

REIT classification and NAV floor enhancement

In November 2025, SEBI notified amendments to the Mutual Fund Regulations to classify Real Estate Investment Trusts (REITs) as equity-related instruments, effective from 1 st January 2026. Under the revised framework, REITs are explicitly recognised within the equity classification, enabling their inclusion in equity-oriented portfolios, subject to applicable investment limits. The amendment was introduced to align the regulatory framework with evolving market dynamics, as REITs have emerged as a meaningful asset class in India. As of November 2025, the market capitalisation of listed REITs in India exceeded 1.4 lakh crore. The earlier regulatory framework did not clearly classify REITs, limiting their participation in diversified equity portfolios. Overall, the changes are expected to improve investment flexibility and broaden portfolio diversification opportunities for mutual funds while strengthening investor protection through improved repurchase pricing safeguards. Existing REITs investments held by debt schemes as on 31 st December 2025, have been grandfathered, with AMCs encouraged to gradually realign portfolios in line with market conditions and investor interests.

Comprehensive overhaul of regulatory framework and cost structures

In January 2026, SEBI notified a comprehensive overhaul of the mutual fund regulations, replacing the legacy 1 996 framework, with the revised regulations becoming effective from 1 st April 2026. The reform was introduced to streamline a fragmented regulatory structure that had evolved through multiple amendments over time. A key change under the revised framework is the rationalisation of the Total Expense Ratio (TER) through the introduction of a Base Expense Ratio (BER). The BER represents the core fund management and operating expenses, separating certain additional expenses such as brokerage, transaction cost and statutory levies, thereby providing greater transparency in cost structures. The revised framework also segregates distribution-related expenses from core expense structures, enabling clearer disclosure of commissions and improving comparability across schemes. In addition, certain incremental expense allowances available under the earlier framework have been withdrawn or rationalised. These measures are aimed at enhancing transparency and improving cost efficiency. Overall, the reforms are expected to strengthen governance standards and contribute to a more investor-centric and efficient mutual fund ecosystem.

Categorisation and rationalisation of mutual fund schemes

In March 2026, SEBI issued a revised framework for categorisation and rationalisation of mutual fund schemes, effective 26 th August 2026. The reform was introduced to address issues such as portfolio overlap across schemes, limited product differentiation, and evolving investor preferences, including the growing focus on goal-based investing. Under the revised framework, SEBI has introduced new product categories, including life-cycle funds, which dynamically adjust asset allocation between equity and debt based on an investors age or investment horizon, thereby aligning portfolios with long-term financial goals. The framework also introduces sectoral debt funds and mandates stricter portfolio differentiation norms, including a 50% cap on overlap for sectoral and thematic schemes.

In addition, the revised framework provides greater flexibility for residual exposure to permitted asset classes such as gold and silver instruments, Infrastructure Investment Trusts (InvITs) and other liquid instruments, with the objective of improving portfolio construction and product clarity. Overall, the revised framework is aimed at enhancing transparency, strengthening scheme differentiation and improving alignment between investment products and their stated objectives, thereby supporting investor protection and market discipline.

Voluntary debit freeze facility for mutual fund folios

In March 2026, SEBI introduced a voluntary lock-in or debit freeze facility for mutual fund folios, effective 30 th April 2026. The measure was introduced to enhance the digital security of mutual fund investments amid increasing adoption of digital investment channels. Under the framework, investors are provided the option to place a debit freeze on their mutual fund folios, restricting debit transactions until the freeze is lifted. In the initial phase, the facility is to be made available through the inter-operable RTA platform, MF Central, for KYC-compliant investors with registered mobile numbers and email addresses. The framework aims to provide an additional layer of protection by enabling investors to proactively safeguard their holdings against unauthorised debit transactions. Overall, the facility is expected to strengthen investor protection frameworks and enhance confidence in the mutual fund ecosystem by mitigating operational and fraud-related risks.

INDUSTRY OUTLOOK

AUM growth estimated to continue at 16-18% CAGR between FY 2026 and FY 2030

In our view, the industrys AUM is likely to grow at a CAGR of 16-1 8% between FY 2026 and FY 2030, reaching 155 lakh crore. This growth is expected to be driven by:

• SIP culture and retail resilience: SIP inflows have remained robust, providing stability to long-term flows and supporting AUM growth, despite intermittent market volatility

• Rising retail participation: The increasing financialisation of savings, supported by digital access, continues to bring investors from Tier 2 and Tier 3 cities to invest in mutual funds

• Digital distribution expansion: The growth of fintech platforms, direct plans, and simplified onboarding processes is improving accessibility and investor convenience

• Shift from traditional savings to financial assets: The moderate returns from traditional instruments is encouraging a gradual reallocation towards market-linked products

• Indias structural economic growth: Strong macroeconomic fundamentals and a positive corporate earnings outlook continue to support long-term equity market performance

• Product innovation and diversification: The increasing adoption of passive funds, hybrid products, and goal-based solutions are catering to evolving investor needs

• Favourable demographics and rising incomes: The expansion of the middle class and higher disposable incomes are expected to sustain long-term investment flows

• Regulatory and policy support: The continued focus by SEBI and other regulators on transparency, investor protection, and product standardisation is strengthening investor confidence

• Increasing financial literacy: Industry-led awareness initiatives are improving investor understanding and participation across segments

Equity AUM to grow at 15-17% CAGR between FY 2026 and FY 2030

In FY 2026, the equity AUM grew by 21 .5% year-on-year to reach 49 lakh crore following a robust 29.2% year-on-year growth in FY 2024. While overall growth remained strong, inflows weakened in Q4 FY 2026 amid heightened geopolitical tensions, particularly the US-lsrael-lran conflict, which dampened investor sentiment and moderated the pace of AUM accretion. Equity AUM is expected to grow at 15-17% CAGR between March 2026 and March 2030, making it the second fastest category among all mutual fund segments. ETFs are expected to grow marginally faster than equity mutual funds over the next four years, driven by the rising popularity of passive investing.

In FY 2026, the debt mutual funds sector experienced a gradual recovery. This recovery follows a period of subdued flows in earlier years and reflects improving investor sentiment towards fixed-income products. The outlook for debt mutual funds in India remains cautiously optimistic, supported by macroeconomic trends, structural reforms, and increasing institutional participation. Over March 2026 to March 2030, the segment is expected to grow at a double-digit rate of 12-14% CAGR driven by rising demand for fixed- income solutions, institutional inflows, product innovation, and improving return prospects as inflation stabilises and interest rates decline.

The quarterly average liquid/money market funds grew by 13% in FY 2026, as the segment witnessed second-highest net inflows among all categories. The segment is expected to grow at a CAGR of —9-10% between March 2026 and March 2030. The growth is driven by continued demand for low-risk, short-duration instruments, particularly from corporates and treasury participants, along with relatively short-term interest rates.

Trend in AUM and growth across mutual fund segments till March 2030 (in Rs. lakh crore)

	FY21	FY22	FY23	FY24	FY25	FY26	YoY growth (Mar 23- Mar 24)	YoY growth (Mar 24- Mar 25)	YoY growth (Mar 25- Mar 26)	Mar-30P	CAGR (FY26-30)
Equity	13.6	19.2	22.0	31.2	40.4	49.0	42.0%	29.2%	21.5%	86.5	15.3%
Debt	10.2	8.0	6.1	8.9	9.7	10.7	44.1%	9.6%	10.4%	16.9	12.0%
Liquid / Money	5.5	7.0	7.3	7.4	9.3	10.5	0.8%	26.1%	13.0%	15.3	10.0%
ETFs	2.9	4.1	5.1	6.7	8.1	11.3	31%	21.0%	40.0%	29.5	27.1%
Total	32.1	38.4	40.5	54.1	67.4	81.5	33.7%	24.6%	20.9%	148.2	16.1%

Note: P: Projected; As per quarterly average AUM. Equity includes equity funds, ELSS, index funds, solution-oriented funds, and balanced funds. Debt funds include gilt, income, conservative hybrid, floater funds, and Fund of funds (FoFs) investing overseas. ETFs includes gold ETF and other ETFs. Liquid/ money market includes liquid funds, overnight funds, and money market funds.

Source: AMFI, CRISIL Intelligence

KEY GROWTH DRIVERS & ENABLERS

India expected to remain one of the fastest-growing economies in the world

Despite heightened global uncertainties, including geopolitical tensions in West Asia and evolving trade dynamics, Indias economic outlook for the FY 2027 remains resilient and is expected to remain among the fastest-growing major economies globally. Growth in FY 2027 is likely to be supported by continued strength in domestic demand, improving household consumption, healthy balance sheets of banks and corporates, goods and services tax rate rationalisation and sustained government-led capital expenditure. Additionally, improving business sentiment, rising consumer confidence, record GST collections, and increasing integration into global supply chains are expected to further support growth momentum. As per the Monetary Policy Statement of the RBI MPC 2026- 27 dated 5 th June 2026, the real GDP growth in FY 2027 is projected at 6.6%, down from the previous projection of 6.9%.

Industry-wide initiatives driven by both the private and public sector

The Indian government has launched several initiatives to promote the mutual fund industry, with a focus on rural penetration, investor protection and financial inclusion. AMFI and India Post are training postmen as distributors, while products like Choti SIP (Rs. 250/ month) and Tarun Yojana for young investors were introduced. Awareness campaigns, such as Your Money, Your Right, educate investors about their rights. Regulatory upgrades, effective 1 st April 2026, are expected to improve transparency and governance. Incentives are being offered for investments in B30 cities, and industry initiatives such as MITRA are aiming to help recover forgotten investments.

The low penetration of mutual funds in India is largely attributed to limited investor awareness. However, penetration is increasing owing to various regulatory initiatives focused on investor education and awareness. SEBI has directed AMCs to annually allocate at least 2 basis points (bps) of their daily net assets towards investor education initiatives, such as improving awareness about capital market investment products. Such spending is expected to rise alongside the growth in industry AUM, thereby helping to deepen mutual fund penetration among new investors, particularly in B30 markets. Additionally, EPFOs move to invest 15% of its fresh accretion into ETFs has boosted the industry, illustrating how mutual funds can be promoted as a vehicle for retirement planning in India. The substantial share of the young population further offers significant potential for retirement planning products.

Increasing awareness about capital markets and rising market penetration among the population expected to support industry growth

Indias capital market penetration has increased significantly, with —22.5 crore demat accounts as of March 2026, acting as a structural driver for the long-term expansion of the mutual fund industry. The total number of demat accounts increased from 2.3 crore in March 2015 to 22.5 crore in March 2026, registering a CAGR of —23% during the period. The growth in demat accounts reflects increasing awareness and a greater willingness among individuals to participate in capital markets, either for trading purposes or long-term investment objectives.

Demographic profile expected to continue supporting folio growth in capital markets

India has one of the largest young populations in the world. As per the data released by the World Bank, Indias population stood at —145 crore in 2024, of which —93% was below the age of 65 years. In comparison, —85% of Chinas population, —82% of the United States population, and —89% of Brazils population were below the age of 65 years in 2024.

Further with regards to long-term investment products, the increase in life expectancy and aspirations of the working population (for example, the need to build a strong corpus before retirement) is also increasing, leading to more focus on equity investments in capital markets.

Rise of discount brokers driving mutual fund participation

The rise of discount brokers has been a game changer in the Indian mutual fund industry, transforming the way investors invest and contributing significantly to the industrys growth. With their low-cost, technology-driven, and paperless investing solutions, discount brokers have made investing more accessible and affordable for retail investors. As a result, these brokers have played a crucial role in increasing the mutual fund AUM, which grew from — ? 32 lakh crore in March 2021 to ? 81.5 lakh crore by 31 st March 2026. These platforms have enabled investors to invest in mutual funds easily and conveniently, with features such as instant, paperless onboarding and the ability to start, modify, or pause SIPs. As a result, monthly SIP inflows increased to over ? 34,900 crore as of March 2026. The impact of discount brokers on retail participation in the mutual fund industry has been significant. They have contributed to the rise in B30 city participation. By making investing more accessible and affordable, discount brokers have promoted financial inclusion and literacy, particularly among millennials and first-time investors.

Increasing participation of retail investors

Individual investors (i.e., excluding promoters and institutions) ownership in NSE-listed companies increased steadily over the years, reflecting growing confidence in Indian equity markets. The increasing share of mutual funds in household financial savings, driven by expectations of higher and stable returns, is a key factor expected to contribute to fund inflows, especially into passive and equity fund categories.

The total mutual fund AUM of retail investors, including Funds of Funds Scheme - Domestic, stood at Rs. 21.2 lakh crore as of 31 st March 2026 accounting for —26% of total mutual fund AUM. This growth was primarily driven by increasing retail investor in equity oriented and gold ETF mutual fund schemes.

Digital infrastructure accelerating accessibility to mutual fund across India

The adoption of digital technologies continues to expand rapidly in India, supported by a favourable demographic profile and a relatively young and tech-savvy population. Increasing smartphone penetration and improved internet connectivity have made digital financial transactions more seamless and accessible. As a result, investors are increasingly leveraging digital platforms for investment activities, thereby enhancing convenience and reducing transaction frictions. Digitalisation is also enabling operational efficiencies and cost optimisations for industry participants.

KEY CHALLENGES TO THE INDUSTRY

Shift towards direct market investing and passive alternatives

The Indian investment landscape is witnessing a structural shift, with a growing segment of investors, particularly younger and digitally savvy investors, increasingly opting for direct market investments over traditional mutual fund products. The rise of low-cost passive instruments such as ETFs and index funds, along with the increasing adoption of direct equity investing through digital platforms has led to gradual disintermediation within the mutual fund ecosystem. Further, new-age investment platforms offering curated portfolios and thematic baskets have gained traction by providing investors with greater control, transparency and flexibility. These platforms, coupled with lower perceived costs and simplified user interfaces are attracting investors who may otherwise have participated in actively managed mutual funds. This shift poses a structural challenge for AMCs, particularly in active fund categories, as it may lead to moderation in incremental flows and increased pressure on expense ratios.

Market volatility amid an adverse macroeconomic and geopolitical environment

Market volatility remained elevated during FY 2026, driven by a combination of global and domestic factors including geopolitical tensions, inflationary pressures, and evolving monetary policy trajectories. While the first three quarters of the FY 2025-26 witnessed strong investor participation and sustained inflows, volatility in the fourth quarter amid the escalation of conflicts in West Asia and global risk-off sentiment, led to a moderation in net inflows and intermittent outflows across select categories. This resulted in a temporary flattening of AUM growth during the latter part of the FY 2025-26 despite strong momentum in earlier quarters. Equity- oriented schemes, being inherently sensitive to market movements, witnessed heightened redemption pressures during periods of correction, reflecting cautious investor sentiment. More broadly, such volatility impacts investor behaviour by reducing risk appetite and potentially shifting flows towards relatively safer asset classes.

Limited penetration of mutual funds beyond urban areas

Despite strong growth in recent years, mutual fund penetration in India remains relatively low compared to global benchmarks, indicating significant headroom for expansion. As of FY 2026, the industry had —12.9 crore unique investor accounts, representing —8% of the countrys population, thereby highlighting the nascent nature of retail participation. While awareness and adoption have improved meaningfully in urban centres, a large segment of the population in semi-urban and rural regions continues to remain underpenetrated. This is driven by limited financial literacy, preference for traditional savings instruments, and lower access to formal investment channels. As a result, expanding investor awareness and deepening participation beyond top cities remains a key challenge for the industry. Addressing this gap will be critical to sustaining long-term AUM growth, particularly as incremental flows increasingly depend on broader retail inclusion across Tier 2 and Tier 3 markets.

Increased competition from ULIPs

Investors have been gradually reallocating their savings to mutual funds in recent years. However, insurance products such as Unit- Linked Investment Products (ULIPs), which provide dual benefits of protection and long-term savings, are competing for market share with mutual funds. However, ULIPs have higher costs due to the insurance component and returns may potentially be lower and subjected to market risks. Direct equity investments offer higher potential returns, albeit amid higher volatility and require greater product understanding and risk appetite.

Mutual funds with professional management, diversification, wide product choice and risk diversification continue to remain competitive with other investment vehicles. Long-term tax benefits on mutual funds offer reduced tax liability for investors. Equity- oriented mutual funds held for more than one year are taxed at a concessional rate of 12.5% on gains exceeding the Rs. 1 .25 lakh threshold. Additionally, Equity-Linked Savings Schemes (ELSS) offer tax deductions of up to Rs. 1.5 lakh under Section 80C, while debt funds held for more than three years are taxed 20% with indexation benefits, allowing investors to offset long-term capital losses against gains and reduce tax liability.

EQUITY MARKET PERFORMANCE IN INDIA & OUTLOOK FOR FY 2027

Indias stock market in FY 2026 exhibited a tale of two halves, with a strong first three quarters followed by a sharp correction in the fourth quarter, driven by the outbreak of the US-lsrael-lran conflict on 28t February 2026. The National Stock Exchange (NSE) Nifty 50 index concluded FY 2026 with a decline of 5.1% year-on-year, closing at 22,331 .40 points, while the Bombay Stock Exchange (BSE) Sensex fell 7.1% year-on-year, closing at 71,947.55 points - marking their worst annual showing since the pandemic-hit FY 2020. The FY 2025-26 was marked by a strong first half, where the Nifty 50 touched an all-time high of 26,373 and the Sensex surpassed 85,000. However, the second half witnessed significant pressure due to sustained foreign portfolio investor (FPI) outflows, sharp escalation due to the conflict in west Asia, and rupee depreciation of over 11 % to all-time lows.

Despite a net foreign investor outflow of 2.28 lakh crore from equity markets of India in FY 2026, domestic investor participation remained remarkably resilient. Domestic Institutional Investors (Dlls) purchased 8.49 lakh crore worth of equities in the cash market during FY 2026, effectively absorbing the entire foreign investor sell-off and preventing a sharper market decline.

FIXED INCOME MARKET PERFORMANCE IN INDIA & OUTLOOK FOR FY 2027

The yield on the 1 0-year benchmark G-sec opened FY 2026 at 6.58% in April 2025 and declined sharply to a three-year low of 6.22% by May 2025, before reversing course in the second half of the year. For most of the FY 2025-26 yields softened, supported by the RBIs cumulative 1 25-basis point-rate-cutting cycle (6.50% to 5.25%), record-scale Open Market Operations (OMOs) exceeding Rs. 6 lakh crore, and CPI inflation averaging a historic low of 2.1% for the full year. The cumulative effect of these supportive factors drove the 1 0-year G-sec yield into the 6.25-6.55% range through most of the FY 2025-26 as projected by market participants at the start of FY 2026.

However, the outbreak of the US-lsrael-lran conflict on 28 th February 2026, and the consequent surge in crude oil prices above US$120 per barrel by end of April led to a reversal in yield trajectory. The 1 0-year yield moved sharply higher, trading 6.87%-6.96% by April 2026, as markets repriced inflation and FY 2025-26 risks, partially offsetting the easing seen earlier in the FY 2025-26.

In response, the RBI maintained the status quo on policy rates at 5.25% in its April 2026 MPC meeting, pausing the rate-cut cycle amid heightened global uncertainty. The RBI continued this stance in its June 2026 MPC meeting as well and revised its FY 2027 CPI inflation forecast to —5.1 %.

Indias continued integration into global bond indices remained a structural positive for the fixed income market. The inclusion of Indian Government Bonds in JP Morgans Government Bond Index-Emerging Markets (June 2024) and Bloombergs EM Local Currency Government Index (January 2025) has driven sustained foreign inflows, with cumulative FPI investments in G-secs crossing Rs. 3 lakh crore by the end of FY 2026. These developments have improved liquidity and deepened the domestic bond market. Overall, while domestic macroeconomic stability, policy support, and global index inclusion provided a favourable backdrop for bond markets during most of FY 2026, late-year geopolitical shocks and commodity price volatility introduced near-term upside risks to yields. Going forward, the trajectory of inflation and global crude prices will remain key determinants of interest rate movements.

Disclaimer

For the preparation of this report, CRISIL Intelligence has relied on third party data and information obtained from sources which in its opinion are considered reliable. Any forward-looking statements contained in this report are based on certain assumptions, which in its opinion are true as on the date of this report and could fluctuate due to changes in factors underlying such assumptions or events that cannot be reasonably foreseen. This report does not consist of any investment advice and nothing contained in this report should be construed as a recommendation to invest/disinvest in any entity. This industry report is intended for use only within India.

COMPANY OVERVIEW Business Overview

UTI Asset Management Company Limited (UTI AMC) is a key player in Indias asset management landscape, with total Assets Under Management (AUM) growing to Rs.23.42 lakh crore as of 31 st March 2026. Our mutual fund business commands a 4.76% share of industry QAAUM, supported by a Quarterly Average AUM of Rs. 3.88 lakh crore that grew 14.34% year-on-year. Backed by a legacy of over six decades and a presence across 699 districts, we remain focused on becoming the asset manager of choice for our diverse investor base.

Risk Management

We follow a structured approach to identify and manage risks across the organisation, spanning credit, market, investment, operational, liquidity, and information security and cyber risks. Our comprehensive risk management framework clearly defines the responsibilities at each level of management. All inherent risks are regularly reassessed, monitored, and reported to the management on a periodic basis. Mitigation strategies are formulated by evaluating the likelihood and impact of each risk. In coordination with the management and the Risk Management Committee, emerging and evolving risks are reviewed periodically to ensure timely implementation of effective control measures.

Internal Control Systems and Adequacy

Our internal controls are designed to align with our business requirements and comply with applicable regulatory standards, enabling efficient and seamless operations. These controls play a vital role in safeguarding assets, preventing and detecting errors or fraud, and ensuring the accuracy and reliability of our financial reporting. The Audit Committee and the Board provide oversight to ensure that processes are properly authorised, documented, and regularly monitored. Additionally, our operations are supported by advanced infrastructure and automated systems for accounting and management information, enhancing both accuracy and efficiency. Operational Performance Mutual Fund As of 31 st March 2026, UTI AMC manages a diversified mutual fund platform spanning Equity, Hybrid, ETFs & Index, Cash & Arbitrage, and Income schemes, with a total Quarterly Average Assets Under Management (QAAUM) of Rs. 3.88 lakh crore - a growth of 14.34% year-on-year. Passive funds (ETFs & Index) were the standout, growing 24.86% over the year, while the platform commands a 4.76% share of industry QAAUM and contributes a 70:30 equity-to-non-equity mix against the industrys 61:39.

Portfolio Management Services

Our Portfolio Management Services (PMS) business, launched in 2004, remains a key offering for our valued clients. As of 31 st March 2026, the PMS business managed total Assets Under Management (AUM) of Rs.1 5.32 lakh crore across discretionary and non-discretionary mandates, growing from Rs.1 3.78 lakh crore a year earlier. Our objective is to deliver tailored investment solutions that align with each clients risk profile and return expectations, using research-driven valuation and security selection methods. As of March 2026, the corpus of the Employees Provident Fund Organisation (EPFO) and the Coal Mines Provident Fund Organisation (CMPFO) was managed under discretionary mandates, while the corpus of the Directorate of Postal Life Insurance (PLI) was managed under a non-discretionary mandate.

Human Resources

At UTI AMC, human capital remains central to long-term business sustainability and value creation, and the Company continues to treat its people as a strategic asset. During FY 2025-26, our people strategy was built around three interconnected pillars - conviction in values, capability development, and sustained commitment, ensuring that growth is achieved responsibly and collaboratively. As the business environment becomes increasingly digital and dynamic, we focused on strengthening leadership depth, enhancing workforce agility, accelerating digital capability, and reinforcing a performance-driven culture.

We follow a calibrated, quality-focused talent acquisition strategy that combines lateral recruitment with early-career hiring, while maintaining a strong emphasis on cultural alignment, workforce renewal, diversity, and employer positioning. During the year, the Company made 258 new hires, with female intake among new hires at 20.9% and an average age of employees hired of 31 .8 years, reflecting a deliberate move towards a younger, more digitally fluent workforce. Following the Voluntary Seperation Programme, hiring remained selective and centred on business-critical functions such as digital and analytics, investment research, sales effectiveness, and risk and compliance, complemented by internal redeployment to transition existing talent into growth-critical roles.

Continuous learning is integral to our organisational capability. Our digital-first learning ecosystem, supported through blended formats and role-based diagnostics, prioritised digital and automation skills, cloud and cybersecurity awareness, investment-domain certifications, and leadership development. During FY 2025-26, the Company delivered 581.9 manhours of training, of which 176.9 manhours were via digital platforms, trained 1,51 8 employees, and invested Rs.1.84 crore in training and development. Our Development Centres brought structure to succession planning, with 9 senior officials coached for succession planning.

We continued to strengthen employee well-being through integrated physical, mental, and emotional health initiatives, alongside enhancements to retirement and family pension benefits that reinforced financial security and morale. These efforts, monitored through attrition analytics, structured feedback, and performance insights benchmarked against industry peers, supported an employee retention rate of 71%.

Advancing diversity, equity and inclusion remained a priority across hiring, development, and culture. Women as a proportion of the total workforce stood at 26%, and targeted mentoring, leadership-readiness, and role-rotation programmes are building stronger pipelines for women in revenue-generating roles. With 100% training coverage across POSH, AML, and ESG frameworks, our focus is progressively shifting from compliance completion to behavioural outcomes, embedding integrity, accountability, and values-led conduct across the organisation.

Financial Performance Review

Consolidated Financial Performance Review

Particulars	FY 2025-26	FY 2024-25
Current Ratio	8.24	10.46
Operating Profit Margin (%)	38.04	44.11
Net Profit Margin (%) 2	29.83	39.33
Return on Equity (%) 3	11.22	16.28

Operating Profit Margin indicates Core Profit Before Tax (excluding exceptional items) to Core Income: The primary reason for decrease in Operating profit margin is increase in total expenses due to expansion of different business verticals.

2 Reason for decrease in Net Profit Margin: The primary reason for the decrease in Net profit margin is due to decrease in Net gain on fair value changes and increase in operating expenses excluding exceptional items.

3 Reason for decrease in Return on Equity: Profit after tax attributable to owners of the company has deceased on YoY basis due to decrease in Net gain on fair value changes and increase in total expenses.

Total Income

The total income for the FY 2025-26 year ended 31 st March 2026 stood at Rs. 1,714.05 crore, a decrease of Rs. 145.89 crore, or 7.84%, from Rs. 1,859.94 crore for the FY 2024-25 year ended 31 st March 2025. This decrease is primarily due to lower Net gain on fair value changes from investments of the group.

Sale of Services

Sale of services for the FY 2025-26 year ended 31 st March 2026 stood at Rs. 1,538.92 crore, an increase of Rs. 93.61 crore or 6.48% from Rs. 1,445.31 crore for the FY 2024-25 year ended 31 st March 2025. The increase is largely attributed to the increase in management fees from mutual fund business and from NPS business. Sale of service as a percentage of total income was 89.78% for FY 2025-26 year ended 31 st March 2026 as compared to 77.71 % in FY 2024-25 year ended 31 st March 2025.

Other Income

For the FY 2025-26 ended 31 st March 2026 other income was Rs. 16.00 crore, an increase of Rs. 7.15 crore, or 80.79%, from Rs. 8.85 crore for the FY 2024-25 year ended 31 st March 2025. The principal reason behind this is due to the interest received on income tax refund.

Expenses

Fees and Commission Expenses: Fees and commission expenses increased by Rs. 1 .14 crore, or 43.51%, from Rs. 2.62 crore in the FY 2024-25 year ended 31 st March, 2025 to Rs. 3.76 crore in the FY 2025-26 ended 31 st March 2026. This was primarily a result of increase in marketing fees paid to UTI International on account of marketing of domestic mutual fund schemes.

Finance Cost: Finance cost increased by Rs. 0.50 crore or 3.93% from Rs. 1 2.71 crore in the FY2024-25 year ended 31 st March 2025 to Rs. 1 3.21 crore in the FY 2025-26 ended 31 st March 2026. This was mainly because of the full year impact of opening of new UFCs in the last financial year.

Employee Benefit Expenses: Employee benefit expenses increased by Rs.94.74 crore or 20.69% from Rs.457.95 crore in the FY 2024-2 ended 31 st March 2025 to Rs.552.69 crore in FY 2025-26 ended 31 st March 2026. This increase in employee expenses was primarily driven by substantial investments across all three lines of business of subsidiary companies, aimed at strengthening their workforce. Also, employee cost of current FY 2025-26 year includes onetime impact of Rs.24.94 crore due to change in the family pension benefits. Employee benefit expenses as a percentage of total income were 32.24% for the FY 2025-26 ended 31 st March 2026 as compared to 24.62% for the FY 2024-25 ended and 31 st March 2025.

Depreciation and Amortisation Expenses: Depreciation and amortisation expenses increased by Rs.5.32 crore or 11 .68% from Rs.45.54 crore in the FY 2024-25 ended 31 st March 2025 to Rs.50.86 crore in the FY 2025-26 ended 31 st March 2026. This increase in the depreciation expenses is led by higher capitalisation in current financial year. Depreciation and amortisation expenses as a percentage of total income stood at 2.97% for the FY 2025-26 ended 31 st March 2026 compared to 2.45% for the FY 2024-25 ended 31 st March, 2025.

Other Expenses: Other expenses increased by Rs.44.08 crore or 15.26% from Rs.288.95 crore in the FY 2024-25 ended 31 st March 2025 to Rs.333.03 crore in FY 2025-26 ended 31 st March 2026. This was mainly because of increase in IT infrastructure expenses, advertisement and business promotion, higher CSR spending, foreign exchange impact for international business and higher membership fees paid to PFRDA which is in tandem with the increase in the NPS AUM. Other expenses as a percentage of total income were 1 9.43% for the FY 2025-26 ended 31 st March 2026 compared to 15.54% for the FY 2024-25 ended 31st March 2025. Exceptional items: During the quarter ended 30 th September 2025, the Company introduced a Voluntary Separation Programme (VRS) for eligible employees, allowing them to apply until 31 st October 2025. During the year ended 31 st March 2026, the Company provided Rs.84.64 crores for 164 employees who opted for VRS, as part of full and final settlement, the Company also incurred additional gratuity expense of Rs.2.89 crore for early settlement and pension liability of Rs.16.75 crore as pension payouts commenced immediately on retirement as compared to future payouts based on the original retirement dates. Overall expense charge on account of voluntary separation programme amounting to Rs.104.28 crore has been recognised as an exceptional item in the financial results the year ended March 31, 2026.

Pursuant to the notification issued by the Ministry of Labour and Employment, the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively referred to as the New Labour Codes) became effective from 21 st November 2025. The Company has reassessed its employee benefit obligations in accordance with the revised definition of wages. As a result, an incremental gratuity liability on account of past service cost, calculated in accordance with Ind AS 1 9 - Employee Benefits, amounting to Rs.4.62 crore has been recognised as an exceptional item in the financial results for the year ended 31 sl March 2026.

Profit Before Tax: Profit before tax for the FY 2025-26 ended 31 st March 2026 was Rs.651 .60 crore, a decrease of Rs.400.57 crore, or 38.07%, from Rs.1,052.1 7 crore for the FY 2024-25 ended 31t March 2025. This decrease is primarily due to decrease in Net gain on fair value changes and increase in Operating Expenses and one time impact of the exception Items. As a percentage of total income, profit before tax was 38.02% in the FY 2025-26 ended 31 st March 2026 and 56.57% in the FY 2024-25 ended 31 st March 2025.

Tax Expenses: In the FY 2025-26 ended 31 st March 2026, our tax expenses decreased by Rs.60.04 crore or 25.10% from Rs.239.21 crore in the FY 2024-25 ended 31 st March 2025 to Rs.1 79.1 7 crore in FY 2025-26 ended 31 st March 2026. The decrease in the current tax was Rs.1 3.37 crore or 6.44% from Rs.207.70 crore in the FY 2024-25 ended 31 st March 2025 to Rs.1 94.33 crore in FY 2024-25 ended 31 st March 2026. This was mainly because of decrease in the taxable income. Deferred tax expenses decreased by Rs.46.67 crore from deferred tax expenses of ?31.51 crore in the FY 2024-25 ended 31 st March 2025 to (Rs.15.16) crore in FY 2025-26 ended 31 st March 2026, is due to the reversal of deferred tax liability created on Marked to Market gain on the investment income of previous fiscal years.

Profit After Tax (attributable to the owners of the Company): Profit after tax (attributable to the owners of the Company) for the FY 2025-26 ended 31 st March 2026 was Rs.404.12 crore, a decrease of Rs.327.37 crore, or 44.75%, from Rs.731 .49 crore for the FY 2024-25 ended 31 st March 2025. This decrease was primarily due to decrease in Net gain on fair value changes and increase in operating expenses and the one-time impact of exceptional Items in FY 2025-26 ended 31 st March 2026 as compared to FY 2024-25 ended 31 st March 2025. As a percentage of total income, profit after tax was 23.58% in the FY 2025-26 ended 31 st March 2026 and 39.33% in the FY 2024-25 ended 31 st March 2025.

Corporate Governance and Secretarial Practices

Your company has continued to adopt secretarial practices so as to align corporate governance with evolving regulatory framework. This commitment is reflected in several key efforts:

Compliance and Regulatory Adherence: We have ensured strict compliance with all applicable laws, regulations, and guidelines. Our Corporate Secretariat team has diligently monitored changes in regulatory requirements and promptly updated our practices to maintain full compliance.

Transparency and Accountability: Regular updates and comprehensive reports have been provided to stakeholders, reflecting our commitment to accountability and openness in all corporate actions.

Board Governance: Our secretarial practices have supported the effective functioning of the Board of Directors and its various committees. This includes the timely preparation and distribution of board materials, meticulous recording of minutes, and ensuring that board decisions are implemented efficiently.

Ethical Standards: We have reinforced adherence to a robust corporate governance policies and the promotion of ethical behaviour across all levels of the organisation.

Stakeholder Engagement: Our Corporate Secretariat team has played a pivotal role in facilitating effective communication and engagement with stakeholders viz. organising annual general meetings, intimation through stock exchanges, responding to shareholder queries, and ensuring that stakeholder interests are considered in corporate decision-making.

Shareholder Queries and Complaints Mechanism

Our company is committed to maintaining open and effective communication with our shareholders. To ensure that their queries and complaints are addressed promptly and efficiently, we have established a robust mechanism:

Dedicated Communication Channels: Shareholders can reach out to us through multiple channels, including email, phone, through registrar and transfer agent i.e. KFintech. These channels are monitored regularly to ensure timely responses.

Tracking and Reporting: All queries and complaints are logged and tracked through our internal system. This allows us to monitor the status of each case and ensure that it is resolved satisfactorily. Regular reports are generated to review the types and frequency of queries and complaints, helping us identify areas for improvement.

Feedback: We encourage shareholders to provide feedback on their experience with our query and complaint handling process. This feedback is invaluable in helping us refine and enhance our mechanisms to better serve our shareholders.

Transparency and Accountability: We are committed to transparency in our dealings with shareholders. Regular updates on the status of their queries and complaints are provided, and we ensure that all responses are clear, accurate, and comprehensive. We continuously review and improve our shareholder query and query / complaint handling mechanism.

By implementing these measures, we aim to foster a positive relationship with our shareholders, ensuring their concerns are addressed promptly and effectively, and reinforcing our commitment to good corporate governance.

Our secretarial practices have been inculcated to the subsidiary companies also. The corporate governance policies were adopted by the subsidiary companies. All these activities have been done to the extent not conflicting their business and compliance model. Cautionary Statement

The statements in the Management Discussion and Analysis section that describe organisational objectives, projections, estimates and predictions may be considered forward-looking statements. All statements relating to expectations or projections about the future, including but not limited to those concerning the Companys strategy for growth, product development, market positioning, expenditures and financial results, are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations will prove to be accurate or will be realised. As a result, the actual results, performance or achievements may differ materially from those expressed or implied in such forward-looking statements. The Company assumes no obligation to publicly amend, modify or revise any forward-looking statements in light of subsequent developments, information or events.

To avoid duplication, certain information required to be disclosed in the Management Discussion and Analysis has been included in the Boards Report.