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SIP flows above ₹26,000 Crore in Dec-24, but SIP stoppage spikes again

13 Jan 2025 , 02:12 PM

SIP FLOWS SPIKE AGAIN IN DECEMBER 2024

After the brief lull in November, when SIP flows were flat, it is back to its growing ways in December 2024. For the first 9 months of Fiscal FY25 the SIP flows averaged ₹23,447 Crore a month. Interestingly, the gross SIP inflows at ₹26,459 Crore in December 2024 was a good 12.8% above the average of FY25. On the positive side, the gross SIP flows have now held above ₹25,000 Crore for 3 months in a row. Total MF SIP folios stands at 22.50 Crore as of December 2024; of which SIP folios are 10.32 Crore; accounting for 45.9% of all folios.

If we track the numbers for the first eight months, the gross SIP flows in FY25 promise to be substantially higher than FY24. The month of December 2024 saw the overall mutual fund AUM contracting to ₹66.93 Trillion from ₹68.08 Trillion in the previous month. Of course, the AUM change is a mix of inflows and price depletion, at least for equity and equity oriented assets. For active debt funds, the growth has predominantly come from flows.

SIPS ONCE AGAIN PICK UP POSITIVE TRACTION IN DECEMBER 2024

The slight fall in monthly SIP flows in November 2024 was a flash in the pan. If you compare the December 2024 SIP flow with December 2023 SIP flow, it is higher by 50.2% yoy.

Monthly

MF Data

Monthly SIP Inflows
(₹ Crore)
Dec-23 17,610
Jan-24 18,838
Feb-24 19,187
Mar-24 19,271
Apr-24 20,371
May-24 20,904
Jun-24 21,262
Jul-24 23,332
Aug-24 23,547
Sep-24 24,509
Oct-24 25,323
Nov-24 25,320
Dec-24 26,459

Data Source: AMFI

Gross SIP flows into mutual funds have now averaged ₹23,447 Crore in the first 9 months of FY25. While SIPs and NFOs are boosting the folio count on one side, the customer mix is also making a difference. A lot of the younger crowd are automatically gravitating towards equity mutual fund SIPs to create long term wealth in a systematic manner. Many of the young and well-earning investors are also willing to invest in a long term financial plan to meet their goals. That is also making a case for equity mutual fund SIPs.

SIP FLOWS – FY25 IS THE BEST YEAR IN TERMS OF MILESTONES

The table below captures month-wise SIP flows into mutual funds since April 2016. Each milestone of an additional ₹1,000 Crore has been highlighted in bold.

Month FY25 FY24 FY23 FY22 FY21 FY20 FY19 FY18 FY17
March   19,271 14,276 12,328 9,182 8,641 8,055 7,119 4,335
February   19,187  13,686 11,438 7,528 8,513 8,095 6,425 4,050
January   18,838  13,856 11,517 8,023 8,532 8,064 6,644 4,095
December 26,459 17,610 13,573  11,305 8,418 8,518 8,022 6,222 3,973
November 25,320 17,073  13,306 11,005 7,302 8,273 7,985 5,893 3,884
October 25,323 16,928 13,041 10,519 7,800 8,246 7,985 5,621 3,434
September 24,509 16,042  12,976  10,351 7,788 8,263 7,727 5,516 3,698
August 23,547 15,814 12,693  9,923 7,792 8,231 7,658 5,206 3,497
July 23,332 15,245  12,140  9,609 7,831 8,324 7,554 4,947 3,334
Jun 21,262  14,734 12,276  9,156 7,917 8,122 7,554 4,744 3,310
May 20,904 14,749  12,286  8,819 8,123 8,183 7,304 4,584 3,189
April 20,371 13,728 11,863 8,596 8,376 8,238 6,690 4,269 3,122

Data Source: AMFI

Here are some key takeaways from the 8-year SIP flow data.

  1. Now, fiscal year of FY24 is the best full year in terms of milestones, with 6 milestone months achieved; more than any other year in the past. This is even better than the 5 milestone months in FY24. We still have 3 more months to go.
  2. What was the average gap between two milestones? A quick ballpark figure is 3-6 months, although it is just 2 months in FY24 and less than 2 months in FY25. The FY25 average SIP is about 6.70X times the average SIP size in FY17.

With average SIP flows at ₹23,447 Crore in FY25, a logical target by March 2025 would be to stabilize at around ₹30,000 Crore SIP flows a month. That may not be too far off.

READING INTO THE SIP TICKET STORY?

Since FY22, the SIP flows have been progressively improving each year. Clearly, FY25 is going to be a lot better than the previous years. Here is a quick dekko.

Financial
Year
Gross Annual SIP
flows (₹ Crore)
Average Monthly
SIP Ticket (AMST)
YOY Accretion
in (%)
FY16-17 ₹43,921 Crore ₹3,660 Crore  
FY17-18 ₹67,190 Crore ₹5,600 Crore 53.01%
FY18-19 ₹92,693 Crore ₹7,725 Crore 37.95%
FY19-20 ₹100,084 Crore ₹8,340 Crore 7.96%
FY20-21 ₹96,080 Crore ₹8,007 Crore -3.99%
FY21-22 ₹124,566 Crore ₹10,381 Crore 29.65%
FY22-23 ₹155,972 Crore ₹12,998 Crore 25.21%
FY23-24 ₹199,219 Crore ₹16,602 Crore 27.73%
FY24-25 ₹281,369 Crore ₹23,447 Crore 41.24%

Data Source: AMFI

FY24 was the best full year in terms of SIP flows and FY25 has already overtaken the full year SIP flows in 9 months itself. In fact, year FY25 has been the best growth in the last 7 years, despite a much higher base. The CAGR accretion in SIP flows in the last 4 full years post the pandemic has been 30.82%.

SIP FOLIOS IN DECEMBER 2024 – HOW IS THE RETAIL INTENSITY?

The gross accretion to SIP folios continue to remain robust in December 2024. In FY25, May 2024 saw gross SIP registrations of 49.74 Lakhs, June 55.13 Lakhs, July a record 72.62 Lakhs, August 63.93 Lakhs, September 66.39 Lakhs, October 63.70 Lakhs, and November 49.47 Lakhs. December 2024 SIP registrations were at 54.27 Lakhs. The outstanding SIP folios increased from 1,022.67 Lakhs in November 2024 to 1,032.03 Lakhs in December 2024. The net accretion is 9.36 Lakh SIP folios or 0.92%. This is the lowest SIP folio accretion since May 2024.

What about SIP AUM yoy? Between November 2024 and December 2024, the SIP AUM rose from ₹13,54,105 Crore to ₹13,63,137 Crore; a growth of 0.67% on sequential basis. While the flows were normal, the weakness in the indices played spoilsport. As of the close of December 2024, the SIP folios accounted for 45.87% of total MF folios while the SIP AUM accounted for 20.37% of the overall MF AUM.

SIP STOPPAGE RATIO – THINGS GET WORSE IN DECEMBER 2024

AMFI reports monthly SIP flows on a gross basis. That gap between gross and net SIP flows is explained by the SIP stoppage ratio. SIP stoppage is the ratio of SIP accounts discontinued to new SIP accounts opened; and shows stickiness of SIPs. Lower the SIP Stoppage Ratio, the better it is. May 2024 saw an exceptional spike amidst election uncertainty, but SIP stoppage has again spiked to 79.12% in November and further to 82.73% in December 2024.

Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24
52.24% 88.38% 58.68% 51.40% 57.14% 60.72%
Oct-24 Nov-24 Dec-24 FY25 #    
60.91% 79.12% 82.73% 64.31%    

Data Source: AMFI (# – 9 months data)

Since July, the SIP stoppage ratio is consistently up; and this is an outcome of the sense of uncertainty at higher levels of the market. However, the spike has been very sharp in November 2024 and December 2024. The average SIP stoppage ratio for FY25 is up 206 bps over last month.

FY25 ANNUALIZED SIP STOPPAGE RATIO WELL ABOVE PANDEMIC PEAK

Here is the SIP stoppage ratio in last 5 completed  fiscal years and for 9 months of FY25.

FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 #
57.84% 60.88% 41.74% 56.94% 52.41% 64.31%

Data Source: AMFI (# – 9 months data)

The SIP stoppage ratio for FY24 at 52.41% was lower than FY23. However, FY25 has seen a spike in the SIP stoppage ratio to 64.31%; spiking 206 bps since November itself. This is above the pandemic peaks, showing that investors are worried about high levels of the Nifty and Sensex. Typically, a SIP stoppage ratio of 40% to 45% is acceptable. Mutual funds have to arrest the spike in SIP stoppage ratio, if the gains of financialization of savings have to be fully realized. That may be the next big thing on the agenda.

Related Tags

  • MFSIP
  • MutualFunds
  • SIP
  • SIPAUM
  • StoppageRatio
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