Monthly SIP inflows double in three years as equity valuations stay elevated

Mumbai: Indian savers are embracing systematic investing like never before. Average monthly gross inflows through systematic investment plans (SIPs) have more than doubled to ₹28,202 crore in FY26 from ₹13,000 crore in FY23, underscoring the growing preference for disciplined regular investing over the lumpsum route as equity valuations remain pricey.

In SIPs, investors commit a fixed sum at regular intervals, typically monthly, through rupee-cost averaging to reduce impact of market volatility. Total SIP assets under management have ballooned from ₹6.8 lakh crore in FY23 to ₹16.52 lakh crore as of November 2025. The mutual fund industry managed equity assets worth ₹35.38 lakh crore in November.

"Investors have understood the importance of recurring and regular savings by doing SIPs," says A Balasubramanian, MD and CEO, Aditya Birla SL Mutual Fund. What began as a strategy to accumulate assets-ideally at undervalued levels-over time and sidestep the pitfalls of market timing has evolved into one of the most powerful channels for asset gathering by mutual funds. Industry executives attribute the surge to robust equity fund returns in recent years, which have prompted higher allocations from existing investors and drawn in new participants.

Distributors estimate that equity funds still dominate SIP allocations, accounting for about 85% of flows. Meanwhile, the demand for schemes with precious metals as the underlying and hybrid funds has also driven investors to invest in these categories monthly. SIP collections in gold and silver schemes could be roughly 5% of the total monthly flows through this route. In multi-asset and dynamic allocation funds, the SIP flows could be about 8% of the total SIP flows, said distributors. "There is higher demand for SIPs in gold and silver funds, after the sharp rise in price of these metals," says Anup Bhaiya, MD and CEO, Money Honey Financial Services.

The SIP flows revealed by the mutual fund industry body every month are at a gross level and not on a net basis, which only capture the amount coming in. Some industry watchers speculate that the net SIP flows could be almost 30-40% lower than the gross levels. Some investment advisors caution that the SIP frenzy may be masking a lack of planning.

"While the rise in SIP flows is encouraging, the SIP stoppage ratio of 75-80% suggests that many investors are participating mechanically without a clear understanding of asset allocation, risk, or valuation cycles," says Anish Teli, founder, QED Capital Advisors. The SIP stoppage ratio-calculated as discontinued SIPs divided by new registrations-serves as a barometer of investor sentiment. A ratio above 100% signals more plans being halted than initiated.

"SIPs are a tool, not a strategy, and urge investors to align their goals, asset mix, and cash flows before committing," said Teli.