A mutual fund is a pool. Thousands of people put money into one common pot, and a professional team uses that pot to buy a basket of investments: shares of companies, government and company bonds, gold, or a mix. You own a slice of the whole basket in proportion to what you put in.
That is the entire idea. Instead of choosing which company to buy on your own, you buy a share of a basket that someone else maintains full time. If the basket holds sixty companies and one of them has a bad year, the other fifty-nine carry the weight.
In India, mutual funds are run by Asset Management Companies, regulated by SEBI, and sold through registered distributors and platforms. The money is held by a separate custodian, not by the company selling you the fund. That separation is deliberate, and it is why a fund house going out of business does not mean your money goes with it.
You are not buying a stock. You are buying a slice of a basket someone maintains for you.