Contributing SIP ratio dips to 5-month low as stoppages rise

16 Sep 2025 , 11:14 AM

WHAT WE READ FROM SIP STOPPAGE TREND?

It is a while since the SIP stoppage ratio peaked at 353% in April 2025. That was an outcome of the defunct legacy SIP folio clean-up undertaken by the regulator. This may have spiked the SIP stoppage ratio, but surely helped the contributing SIP ratio to improve to new highs. But more on the Contributing SIP ratio later! In the last 4 months the SIP stoppage ratio has averaged 71.8%; and has been above 70% in three out of the four months. This is much higher than the pandemic peak levels, and so it is a cause of worry. It shows a more volatile approach, and more fear amidst market uncertainty Here is the SIP stoppage ratio over last 13 months.

Transaction Month	New SIP Registrations	Total SIPs Discontinued	SIP Stoppage Ratio
Aug-25	55.23	41.15	74.51%
Jul-25	68.69	43.04	62.66%
Jun-25	61.91	48.16	77.79%
May-25	59.15	42.66	72.12%
Apr-25	46.01	162.32	352.79%
Mar-25	40.19	51.55	128.27%
Feb-25	44.56	54.70	122.76%
Jan-25	56.19	61.33	109.15%
Dec-24	54.27	44.91	82.75%
Nov-24	49.47	39.14	79.12%
Oct-24	63.70	38.80	60.91%
Sep-24	66.39	40.31	60.72%
Aug-24	63.94	36.54	57.15%

Data Source: AMFI

The spike in SIP stoppage ratio between January 2025 and April 2025 was due to the clean-up of legacy SIP folios. That explains the SIP stoppage ratio being above 100% in these months, even peaking at 353% in April 2025. After that, the SIP stoppage ratio has been consistently below 100%, since May 2025, although the absolute SIP stoppage ratio levels are much higher than the pandemic peaks. Probably, we need to see what happens to the SIP stoppage if the markets remain in a state of stupor for a few months at a stretch. That is what truly tests the commitment of long-term mutual fund SIP investors.

SIP STOPPAGE AND CONTRIBUTING SIP RATIO – A DUAL HIT

In a sense, August 2025 saw a dual impact. The SIP stoppage ratio has been higher than July while the Contribution SIP Folio Ratio is at its lowest level since March 2025. To an extent, both parameters are related. The spike in SIP stoppage ratio is due to greater sense of caution in markets at higher levels. Ideally, SIPs must continue through crests and troughs for best impact, but investor psychology does move in strange patterns. As investors try to reduce exposure to SIPs, there is one factor that could work in favour of SIPs. SEBI has tightened norms for retail investors to participate in F&O markets, and some of this retail money is expected to gravitate back from F&O speculation to mutual fund SIPs. We have to wait and see how soon it happens!

CONTRIBUTING SIP FOLIOS WEAKEN SHARPLY IN AUGUST 2025

While contributing SIP folio ratio stays above 90%, it is at the lowest level in 5 months.

Transaction Month	Outstanding SIP Folios	Contributing SIP Folios	Contributing SIP Folio Ratio
Aug-25	959.04	898.70	93.71%
Jul-25	944.97	911.18	96.42%
Jun-25	919.32	864.70	94.06%
May-25	905.57	856.00	94.53%
Apr-25	889.08	838.25	94.28%
Mar-25	1,005.39	811.16	80.68%
Feb-25	1,016.75	826.41	81.28%
Jan-25	1,026.89	834.97	81.31%
Dec-24	1,032.03	827.44	80.18%
Nov-24	1,022.67	797.32	77.96%
Oct-24	1,012.34	794.48	78.48%
Sep-24	987.44	774.61	78.45%
Aug-24	961.36	745.10	77.50%

Data Source: AMFI

The Contributing SIP ratio was a direct beneficiary of the folio clean-up exercise which eliminated most of the defunct SIPs. As a result, the Contributing SIP Folio ratio has stayed above 90% since April 2025 and even touched a peak of 96.42% in July 2025. However, this trend has been broken in August 2025 with the Contributing SIP folio ratio at a 5-month low of 93.71%. This can be attributed to a mix of factors like index levels, saturation of investor enthusiasm, and some investment diversification. These can change at short notice!