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.
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.
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