Rich investors are now moving away from FD and mutual funds and investing money in alternative investments. New trends are emerging in the Indian investment market with increasing participation in private credit, fintech, healthtech and renewable energy.
Mutual Funds: The way of investing in India is changing rapidly. Now investors are moving beyond traditional options and investing money in new and emerging sectors. According to a report by CareAge Advisory and Research, the alternative investment sector has grown rapidly in the last decade and is now in a phase of major change.
AIF and alternative investment boom
By December 2025, the total asset under management (AUM) of this sector is expected to reach $152 billion, which has increased more than double in the last 10 years. Experts estimate that by 2030 this figure could reach around $276 billion. This means that this sector will see rapid growth in the coming years.
Interestingly, the share of alternative investment in India is only 4 percent of the country’s GDP, whereas in developed countries it is more than 10 percent. This difference creates the biggest opportunity for this sector.
Changing patterns of investment
Talking about traditional investment options, the share of term deposits was 40.5 percent in FY23, which increased to 44.7 percent in FY25. Mutual funds also increased and reached 20.7 percent in FY25. Whereas the share of PMS increased from 2.7 percent to 3.2 percent. The share of SEBI registered Alternative Investments increased from 3.2 per cent in FY23 to 4.2 per cent in FY25.
This change makes it clear that investors are no longer limited to just safe options, but are looking for better returns and diversification.
Growing role of wealthy investors
The number of High Net Worth Individuals (HNIs) in India is increasing rapidly. According to the report, this number may double between 2022 and 2027. The increasing number of these investors is further strengthening the alternative investment sector.
By December 2025, Indian investors will account for about 66 percent of the total investment. The share of foreign investors has decreased, but their investment is still continuing. This means that the Indian market is now growing on its own strength.
Private credit becomes the new favorite option
The demand for private credit in alternative investments is increasing rapidly. The main reason behind this is stable returns and low risk. Amidst market uncertainty, investors are moving towards such options where money is safe and returns are stable.
Private credit is particularly attractive to investors who want higher returns than banks and traditional investment options, but want to keep risk under control.
Invest now in future sectors
Alternative investing is now increasingly moving towards emerging and futuristic sectors. Investments in fintech, healthtech, renewable energy, IT and real estate are increasing. This means that investors are not only betting on safe but also on fast-growing sectors.
This trend shows that investors are now moving away from traditional routes and investing money in sectors that have a strong future and can give good returns in the long run.
Global uncertainty and challenges
Although opportunities are increasing, challenges are also no less. Ongoing tensions in West Asia, fluctuations in oil prices, inflation and changes in interest rates can impact investment. These factors can affect the returns and stability of alternative investments.
Despite these challenges, experts believe that India’s alternative investment sector is in a strong position. Increasing participation of domestic investors and new investment opportunities will help in taking this forward.
India’s alternative investment sector a force for the future
Rapidly increasing wealth and changing mindset in India is driving this sector forward. Investors are no longer relying only on safe options, but are investing money in fast-growing sectors.
Projections of doubling of AUM by 2030 and increasing number of investors indicate the growth of this sector. If this pace continues, alternative investment can become one of the biggest strengths of the Indian economy.
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