SIP Stoppage eases; Contributing SIPs cross 96%

12 Aug 2025 , 01:25 PM

AFTER A VOLATILE YEAR, SIP STOPPAGE RATIO NORMALIZES

For a brief period, the mutual fund investors and the markets were rattled by the surge in the SIP stoppage ratio to a peak level of 353%. Eventually, the explanation came through that the entire surge in the SIP stoppage ratio was due to clean-up of defunct MF folios, something that had to be done long back. While the market uncertainty has had an impact on the SIP stoppage ratio, we will get a clear picture of the SIP  stoppage ratio, only when we are able to look at it shorn off the defunct SIP baggage. The table below captures how the SIP stoppage ratio has evolved over the last 13 months.

Transaction Month	New SIP Registrations	Total SIPs Discontinued	SIP Stoppage Ratio
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%
Jul-24	72.62	37.33	51.40%

Data Source: AMFI

The SIP stoppage ratio is the ratio of discontinued SIPs to fresh SIPs in any month. If SIP stoppage ratio is under 100%, the pool of SIP folios is growing; but if it is above 100%, SIP folio pool is shrinking. That is the simplest explanation of the SIP stoppage ratio. The SIP stoppage ratio rose steadily between July 2024 and December 2024 from 51.4% to 82.8%; something that can be attributed to valuation concerns and macro risks. However, between January and April 2025, the SIP stoppage ratio spike from 109.2% to 352.8% was largely on account of the reconciliation and cancellation of defunct SIPs.

DEFUNCT SIP CANCELLATION VERSUS CONTRIBUTING SIPS – THE TRADE-OFF

It is, by now, clear that the temporary spike in the SIP stoppage ratio to as high as 353% was an exceptional event due to the cancellation of defunct SIP folios. That surely reduced the number of outstanding SIP folios.  For instance, the SIP folios had crossed 10 Crore in March 2025, but post the reconciliation, it remains under 10 Crore, even at the end of July. However, this is an interesting trade-off. By reducing the defunct SIP folios, the percentage of contributing folios has gone up sharply.  At the end of the day, large number of SIP folios are just cosmetic in nature, if they do not translate into SIP flows. As we shall see now, the cancellation of defunct SIPs resulted in an incredible jump in Contributing SIP folio ratio.

CONTRIBUTING SIP FOLIOS ARE NOW SUBSTANTIALLY HIGHER

As a result of the clean-up, the ratio of contributing SIPs went up sharply and is currently at life-time highs.

Transaction Month	Outstanding SIP Folios	Contributing SIP Folios	Contributing SIP Folio Ratio
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%
Jul-24	933.96	724.79	77.60%

Data Source: AMFI

The Contributing SIP ratio is the ratio of Contributing SIP folios to total SIP folios (folios that matter). With the removal of the defunct SIP folios, contributing SIP ratio has moved up very significantly. As of July 2025, more than 96% of the SIP folios are contributing folios, or you can call them truly meaningful SIP folios. This ratio was under 80% till November 2024 and just around 80% till March. It is simple mathematics. By cutting defunct folios, the contributing SIP ratio is automatically better. In July, it has touched 96.42%!