New SIP registrations surge 88% to 26.6 million in FY22, shows data

Over 26.6 million systematic investment plans (SIPs) were registered in 2021-22 (FY22) — a jump of 88 per cent over the preceding fiscal year (2020-21, or FY21) — reveals data from the Association of Mutual Funds in India. The past 10 months have seen new SIP registrations upwards of 2 million.

Industry officials say that increasing investor awareness of equity funds and an encouraging investment experience have led 

to an uninterrupted participation in SIPs.

Inflows via the SIP route have accelerated since September last year. Last month, they hit a record Rs 12,328 crore.

In FY22, inflows through SIPs stood at Rs 1.24 trillion, against Rs 96,080 crore in FY21.

SIP is an investing technique wherein the investor commits a fixed sum every month as opposed to investing a large sum at one go.

Sustained inflows through this route have provided the domestic mutual fund (MF) industry a solid foundation for growth.

“The appetite for equity as an asset class is on the rise. This is primarily due to confidence of better returns from Indian equities in comparison with other asset classes like fixed income and gold, ongoing volatility offering opportunity to buy more at lower levels, and understanding of the asset class for wealth creation in the long term,” said Akhil Chaturvedi, chief business officer, Motilal Oswal Asset Management Company.

In the past year, large-cap funds on average have given returns of 26.45 per cent, while mid-cap and small-cap funds have given returns of 29.5 per cent and 40.4 per cent, respectively.

On the other hand, most debt categories of funds have on average given returns of less than 5 per cent in the past year.

Equity folios stood at 85.9 million as of March, from 65.7 million a year ago.

Debt-oriented schemes saw their folios down 7.4 million, from 8.2 million in March last year.

The number of discontinued/tenure-complete SIPs has also risen to 11.11 million in FY22, against 8.6 million in FY21.

“While many entered the MF industry in the last two years alone, long-term investors also felt the need to book profits amid higher market valuations. We assume that investors will start their SIPs once the correction in the markets gets over,” observed a senior official from the industry.

Despite volatility in the markets, SIP assets under management as of March stood at Rs 5.76 trillion. Officials in the industry feel that while flows into equity funds may go down if there is market volatility, inflows through SIPs may continue to go up in the months to come.