New Delhi: Contribution of small towns -- known as beyond the top 15 cities (B15) -- to mutual funds' asset base in India has surged 19 percent to Rs 2.02 lakh crore in last fiscal.


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Mutual funds' assets under management (AUM) from B15 grew from Rs 1.7 lakh crore in March 31, 2015 to Rs 2.02 lakh crore at the end of March this year, data available with markets regulator Sebi showed.


A major portion of the products sold within this fast growing pocket of the industry are equity-linked unlike the top 15 space, where institutional dominance tilts the balance towards fixed income products, an industry expert said.


The growth in the asset base could be attributed to a positive outlook in domestic markets along with well-timed initiatives by Sebi to re-energise the mutual fund industry.


During 2015-16, Sebi has taken a slew of regulatory reforms including introduction of mandatory stress testing of liquid fund and money market MF schemes; modification of product labelling; tightening of exposure limits on investments by MFs and enhancement of scheme related disclosures.


Besides, the number of folios or investors' accounts in B15 cities rose by 16.1 percent to 2.09 crore during the period under review. Currently, the overall folio base stand at 4.92 crore.


B15 cities are those which are beyond these top 15 cities - New Delhi (including NCR), Mumbai (including Thane & Navi Mumbai), Kolkata, Chennai, Bengaluru, Ahmedabad, Baroda, Chandigarh, Hyderabad, Jaipur, Kanpur, Lucknow, Panjim, Pune and Surat.


To increase penetration and popularise MF products in rural areas, Sebi had in 2012 mandated fund houses to go to 'B15' cities.


At present, all the mutual fund houses together manage assets worth over Rs 15 lakh crore.