The five southern states — Karnataka, Tamil Nadu, Andhra Pradesh, Telangana and Kerala — put together account for a little over one-third of the AAUM (average assets under management) of Maharashtra in January.
The total AAUM of the five southern states was at ₹10.74 lakh crore in January, accounting for nearly 39 per cent of Maharashtra’s AAUM of ₹27.47 lakh crore.
The five southern states accounted for 16 per cent of the overall industry’s total AAUM of ₹68.05 lakh crore in January.
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Most risk averse investors in southern states often prefer traditional investment options such as fixed deposits, gold and real estate, which are perceived as safer haven, said ICRA Analytics.
The AAUM of the five southern states increased by nearly 127 per cent in the last five years from ₹4.72 lakh crore in January 2021, according to MFI360 Explorer data.
Among the southern states, Karnataka at ₹4.72 lakh crore holds the largest share in AAUM at 6.94 per cent. Tamil Nadu at ₹3.13 lakh crore accounts for nearly 4.59 per cent; Telangana at ₹1.17 lakh crore makes up 1.72 per cent while Andhra Pradesh (₹86,077 crore) and Kerala (₹85,902 crore) account for around 1.26 per cent each.
However, the share of these states has remained almost constant at around 15-16 per cent in the last five years even as the industry has grown steadily.
Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said gold as a preferred investment choice is deeply rooted in cultural traditions and the perception of the metal as a safe and stable investment among people in the region.
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The demand for residential and commercial properties remains strong, driven by urbanization and economic growth in these states, he said.
Besides, he added there is a growing interest in investing directly in equities with the advent of online trading platforms.
Moving ahead, more investors are expected to use apps and online platforms to manage their investments. Moreover, the popularity of Systematic Investment Plans due to their ease and disciplined approach is expected to grow in the coming years, he said.