India's debt mutual funds experienced unprecedented net outflows of ₹1.02 lakh crore in September 2025, a significant increase from ₹7,980 crore in August. This surge was primarily driven by large institutional withdrawals from liquid and money market funds, reflecting seasonal liquidity adjustments and advance tax-related outflows. The substantial redemptions led to a nearly 5% decline in the assets under management (AUM) of fixed-income funds, dropping to ₹17.8 lakh crore from ₹18.71 lakh crore at the end of August.