ET Intelligence Group: Registration of new systematic investment plans (SIPs) continues to grow at a robust pace, and this is helping local funds expand their dominance, which in turn is powering the stock market rally.
New SIP account registrations increased to a record 2.68 million in September 2021, according to data from the Association of Mutual Funds in India (AMFI). It was nearly 2.5 times higher than the long-term average.
It was the fourth consecutive month of new SIP registrations topping 2 million.
The high pace of new SIP registrations boosted net additions to 1.654 million in September 2021 – an all-time high – which offset the pressure from 1.026 million SIP accounts being discontinued in the same month.
The cumulative net SIP registrations in the first half of FY22 stood at 7.66 million. New SIP additions have helped the monthly SIP book expand to a record high of ₹10,351 crore in September 2021.
The SIP book has grown at 22.8% on an annualised basis over the last five years, which has catapulted assets under management of the funds linked to the SIP accounts to ₹5.44 lakh crore in September 2021. This is equivalent to 14.83% of the total industry AUM.
Average ticket size for investment in the SIP accounts stood at ₹2,305. This has been shrinking in the last few months as a large part of new SIP registrations were generated by the digital platforms where ticket size drops below ₹500 for bulk of new investors. The long-term average of ticket size of SIP accounts has been ₹2,923.
The rolling cumulative inflow from the SIP accounts in the six months till end of September 2021 has been ₹56,452 crore, the highest since data has been available with the AMFI.
According to the industry estimate, nearly 90% of SIP accounts are linked to equity-linked funds. This implies that around ₹50,806 crore has entered the equity market through SIP inflows, while in the same duration, FPI inflow in the Indian equities stood at ₹8,259 crore only.