SIPs, Usually Popular, See Decline in New Registrations

New Delhi: In the quarter ending March 31, the mutual fund systematic investment plan (SIP), a savings instrument in the country that has got increasingly popular in the last few years, has seen a dip in new registration, and an increase in stoppages by individuals. 

According to data sourced by the Economic Times from mutual fund analytics platform Valuemetrics Technologies, “From net additions of 2.96 million SIP registration on average every month between July and September last year (2024), the mutual fund industry has lost about 8,90,000 accounts per month on average so far in 2025.” As of March end, the total number of SIP accounts stood at 100.5 million. 

Valuemetrics co-founder Manuj Jain underlined to the financial daily, “This trend of declining new SIP registrations and rising SIP discontinuations coincides with equity market performance.” The Indian stock market has been wobbly for several months now due to various domestic and global factors, leading investors to sell off. The SIPs, which are seen to be the backbone of the mutual fund industry recently, had witnessed fresh registrations of 4.02 million in March, and a decline of 10 per cent over February.

The report says:

“During the July-September period, the peak of the recent bull market, the average number of new SIP registrations was 6.77 million per month, with July seeing 7.26 million new SIP additions, the highest in FY25.”

However, sell-off started on September 27, leading the Nifty to decline to 9.6%, while the Nifty mid-cap 150 and small cap 250 dropped by 14% and 17% respectively. “The flows through SIPs remained resilient for most of the October-December period despite the sell-off, but the prolonged weakness (of the stock market) has triggered doubts in investors’ minds about equity prospects,” said the news report.

The Valuemetrics report showed the highest number of SIPs registered in July 2024 at 8.1%, which by March 2025, had come down to 4%. While June 2024 had seen the highest discontinuation of SIP accounts at 3.7%, by March 2025, it spiked to 5.1%. While in February 2025, it had increased to 5.3%, in January 2025, the industry saw 5.9% discontinuation of SIPs by individuals. 

The latest data put out by the Association of Mutual Funds of India had also showed that inflows into the equity mutual funds on a month-on-month basis had declined to Rs 25,082.01 crore in March, compared to Rs. 29,303.34 crore in February. 

“The inflows in equity schemes in March were lowest in 11 months. The decline in inflows was witnessed despite the Sensex and Nifty rising 5.76% and 6.3%, respectively in March,” said an Indian Express report. 

As per SEBI guidelines, SIPs where three consecutive instalments with respect to daily, weekly and monthly intervals and two consecutive instalments with respective to others failed are treated as ceased or discontinued accounts.    

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