SIP Collection Touches Rs 1.66 Lakh Crore In 2023, SEBI’s Push For Lower Ticket Size To Boost Investment

According to AMFI data, the total investments made in the first 11 months of the year stood way higher than Rs 1.5 lakh crore collected in the entire 2022.

Systematic Investment Plans (SIPs) became increasingly popular as inflows touched Rs 1.66 lakh crore in the first 11 months of 2023. Investors are leaning towards SIPs, while the Securities and Exchange Board of India’s decision to reduce the ticket size to Rs 250 is anticipated to further enhance investment. 

According to the data from the Association of Mutual Funds in India (AMFI), the total investments made in the first 11 months of the year stood way higher than Rs 1.5 lakh crore collected in the entire 2022. Notably, the investments collected in 2021 stood at Rs 1.14 lakh crore, and Rs 97,000 crore in 2020, reported PTI.

Giving an outlook, Akhil Chaturvedi, chief business officer, Motilal Oswal AMC, anticipated, “A sustained and healthy year-on-year growth in overall SIP participation. With a buoyant economic outlook and increased market participation, investors are likely to continue favouring SIPs as a disciplined and accessible investment avenue. The ongoing strength in the market, coupled with the potential for healthy returns, reinforces our belief that the upward trend in SIPs will persist throughout 2024.”

Industry experts stated that multiple factors led to the rise in this inflow such as awareness created by AMFI, demographics, strong return on equity investment, and ease of investment. Chaturvedi noted that AMFI has played a crucial role in increasing awareness about the benefits of SIP and equity investing. Further, the analyst said that demographics played a key role in this growth, and ‘structural change in how people in India perceive and approach equity as an asset class also helped’.

Notably, SIP is an investment tool offered by mutual funds which allow an individual to invest a certain amount in a chosen scheme periodically at fixed intervals, like once a month, instead of going for a lumpsum investment. SIP installments can be as small as Rs 500 per month. 

SEBI also intends to make mutual funds accessible in the future to help in the financial inclusion agenda, and also facilitate the Indian capital market. Earlier this month, SEBI chairperson, Madhabi Puri Buch, said that the markets regulator is also working with mutual funds to make SIPs of Rs 250 possible for the general public, which will boost investments. 

In conversation with PTI, A Balasubramanian, managing director and CEO, Aditya Birla Sun Life AMC, expressed that smaller ticket-sized SIPs would make investment accessible for the lower income group of the population. Zerodha Fund House CEO, Vishal Jain, added, “The push towards smaller ticket size SIPs will help improve participation amongst smaller investors which will emanate into further expediting expansion of the retail base in the country.”

Currently, Aditya Birla Sun Life Mutual Fund provides lower ticket SIPs starting at Rs 100. The SIP book has increased consistently from Rs 11,305 crore in December last year, to touch a peak fresh high of Rs 17,073 crore in November this year. Earlier, monthly SIP contributions crossed over Rs 16,000 crore in September and October. This surge in SIP statistics reflects an increase in trust in the equity markets. 

SIPs’ Assets Under Management (AUM) climbed 38 per cent to touch Rs 9.31 lakh crore at the end of November 2023, against Rs 6.75 lakh crore recorded at the end of December 2022. Presently, mutual funds contain about 7.44 crore SIP accounts. 

The mutual fund industry majorly depends on SIPs for inflows, whereas equity mutual funds saw an inflow of Rs 1.44 lakh crore in the year till November. The regular monthly increase in SIP flows facilitated the industry to grow its AUM to Rs 49 lakh crore in November, compared to Rs 40 lakh crore in December 2022.