Monthly SIP inflows may touch ₹40,000 crore in 18-24 months: Union AMC CEO

Fuelled by rising disposable incomes and growing awareness about disciplined investing, monthly SIP inflows across the mutual fund industry could scale up to ₹40,000 crore over the next 18-24 months, according to Madhu Nair, CEO of Union Asset Management Company (AMC).

SIP inflows stood at ₹25,925 crore in March, although the industry has witnessed a declining trend over the past four months amid heightened market volatility triggered by frequent US tariff changes.

Despite this short-term dip, the broader picture remains optimistic. In 2024-25, the average monthly SIP contribution rose to ₹24,113 crore, a significant jump from ₹16,602 crore in the previous fiscal year.

 

This rise highlights the growing maturity of retail investors, who increasingly recognise the benefits of systematic investing.

However, SIP account numbers declined slightly, from 8.4 crore in March 2024 to 8.11 crore in March 2025.

The SIP assets under management (AUM) continued to grow, reaching ₹13.31 crore in March 2025 compared to ₹10.71 lakh crore registered last year.

Explaining the basis of his optimism, Nair cited the introduction of a more investor-friendly tax regime and improved market valuations. These factors, he said, are likely to encourage more individuals to start or increase their SIP contributions.

Under the new tax regime effective April 1, 2025, individuals earning up to ₹12 lakh annually are exempt from income tax. This substantial boost in disposable income is expected to drive higher household savings into long-term investments such as SIPs.

SIPs remain a favoured investment vehicle among retail investors, allowing individuals to invest small amounts -- starting as low as Rs 250-- at regular intervals in mutual fund schemes. This disciplined approach not only reduces the burden of lump-sum investments but also helps mitigate market volatility over time.

The mutual fund industry majorly depends on SIPs for inflows, whereas equity mutual funds saw an inflow of ₹4.17 lakh crore in FY25, significantly higher than the ₹1.84 lakh crore recorded in FY24.

This substantial increase can be attributed to improved investor sentiment driven by robust corporate earnings, favourable macroeconomic conditions, and a continued shift towards equity as a preferred asset class.

The regular monthly increase in SIP flows facilitated the industry to grow its AUM by 23 per cent to ₹65.74 lakh crore in March 2025, up from ₹53.40 lakh crore in March 2024.

Meanwhile, Union Mutual Fund has upgraded Indian equity markets to the "attractive zone" in its fair value spectrum indicator, according to its latest quarterly state of the market report.

This is a notable shift from the "fair" and "moderately expensive" zones where the markets lingered for most of 2024. The upgrade reflects improving valuations, driven by strong domestic fundamentals and resilient corporate earnings growth.

Stressing on the importance of staying invested in the long run, Nair said, "It's human nature to overestimate short-term impact and underestimate long-term potential. We believe in the long-term promise of the Indian economy and equity markets over the next 10 to 15 years."  He said this long-term view forms the basis of Union AMC's latest SIP campaign, 'Badhna Hai Toh Lagey Raho, SIP Karo', which encourages investors to remain disciplined and goal-focused despite market noise.

Looking ahead, Nair shared the company's plans for 2025-26, which include expanding into Specialized Investment Funds (SIF), Alternative Investment Funds (AIFs), and establishing a presence in GIFT City.

These moves signal Union AMC's intention to grow beyond its traditional mutual fund offerings and tap into broader investment opportunities.