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Equity mutual funds added more than seven lakh investor accounts or folios in the first seven months of the current fiscal (2014-15) in view of sharp rally in the stock market.
Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.
According to Securities and Exchange Board of India data on investor accounts with 45 fund houses, number of equity folios rose to 2,9917,974 at last month-end from 2,91,80,922 at the end of the last fiscal (March 31, 2014), registering a gain of 7,37,052 folios during April-October period this year.
The additions came at a time when the market was scaling new highs.
The month of April saw the first rise in more than four years. Prior to that, the equity mutual fund (MF) sector had seen a continuous closure of folios since March 2009 after the market crashed due to the global financial crisis in late 2008. Since March 2009, it has seen a closure of 1.5 crore folios.
The investor base reached its peak of 4.11 crore in March 2009, while it was 3.77 crore in March 2008.
Industry experts said that strong rally in the equity market and the consequent rise in investors' interest led to a sharp increase in retail folios.
"There has been rise in Systematic Investment Plan (SIP) registration and a lot of close-ended schemes have been launched by mutual fund houses in the past few months and the rise in such activities are supported by a sharp surge in equity market," Quantum Mutual Fund Chief Executive Officer Jimmy Patel said.
The addition in equity folios is in line with BSE's benchmark Sensex surging by 25 per cent in the first seven months of the current financial year.
Moreover, mutual funds industry reported net inflows of nearly Rs 34,000 crore in equity funds in the April-September period of the current fiscal (2014-15), which helped the industry grow its folio count.
Overall, the industry retail folios surged to 3.97 crore at October-end from 3.95 crore at the end of March.
