Monthly SIP Inflows Double in Three Years as Equity Valuations Stay Elevated
Systematic Investment Plans (SIPs) Rise in Popularity
– Indian savers are increasingly favoring Systematic Investment Plans (SIPs), with average monthly gross inflows more than doubling from ₹13,000 crore in FY23 to ₹28,202 crore in FY26.
– This shift highlights a growing preference for disciplined, regular investing over lump-sum contributions, particularly as equity valuations remain high.
The Mechanics of SIPs
– SIPs allow investors to commit a fixed sum at regular intervals, typically monthly, utilizing rupee-cost averaging to mitigate the effects of market volatility.
– As of November 2025, total SIP assets under management surged from ₹6.8 lakh crore in FY23 to ₹16.52 lakh crore.
– The mutual fund industry managed equity assets valued at ₹35.38 lakh crore in November.
Understanding Investor Sentiment
– Investors have recognized the significance of recurring and regular savings through SIPs, states A. Balasubramanian, MD and CEO of Aditya Birla SL Mutual Fund.
– Initially designed to accumulate assets by taking advantage of undervalued levels over time and avoiding the pitfalls of market timing, SIPs have transformed into a vital channel for mutual fund growth.
Monthly SIP Flows and Market Dynamics
– Equity funds dominate SIP allocations, accounting for approximately 85% of total flows.
– Demand for investment schemes linked to precious metals and hybrid funds has also seen a rise, contributing about 5% and 8% to total SIP collections, respectively.
– There’s been heightened interest in SIPs for gold and silver funds following the notable price increases in these metals, notes Anup Bhaiya, MD and CEO of Money Honey Financial Services.
The Importance of Strategic Planning
– Despite the encouraging rise in SIP flows, the stoppage ratio—calculated as discontinued SIPs versus new registrations—ranges from 75-80%. This indicates that many investors may be participating without fully comprehending asset allocation or market valuation cycles.
– Anish Teli, founder of QED Capital Advisors, comments, SIPs are a tool, not a strategy. It’s crucial for investors to align their goals, asset mix, and cash flows prior to committing.
A Final Thought
While the doubling of monthly SIP inflows reflects a positive trend toward disciplined investing, it is vital for investors to approach SIPs with a well-thought-out strategy, ensuring that their investment habits align with their financial objectives and market conditions.