Bullish Momentum: SIP Registrations Surge to Record 4.032 Million in December on Dalal Street

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Bullish Momentum: SIP Registrations Surge to Record 4.032 Million in December on Dalal Street


 "Investor Optimism Soars: Record 40.32 Lakh Sign Up for SIPs Amid Bullish Market Trends"


In December, an unprecedented 40.32 lakh individuals enthusiastically embraced systematic investment plans (SIPs), capitalizing on the sustained bullish momentum in the financial markets. This surge marked a remarkable 31% increase from November and an impressive 73.5% surge from the previous year.

A consistent monthly addition of 30 lakh new SIP registrations since July has propelled the SIP count for FY24 beyond the cumulative figures of FY23 and FY22 combined, as reported by the Association of Mutual Funds in India (AMFI). From April to December 2023, a staggering 2.85 crore new registrations were recorded, surpassing the totals for entire fiscal years FY23 (2.51 crore) and FY22 (2.66 crore). Analysts attribute this surge to heightened investor confidence in India's macroeconomic fundamentals and optimistic expectations of potential interest rate cuts by central banks in the upcoming year.

The recent electoral success of the BJP-led NDA in key state elections further bolstered faith in the continuity of the Narendra Modi-led government's policies, potentially influencing the investment landscape after the general elections around May this year. Analysts anticipate that a third consecutive term for the Modi-led NDA regime could provide a conducive environment for the Indian economy to achieve its ambitious $5 trillion goal.

While new SIP registrations paint a picture of optimism, there is a parallel trend of discontinued SIP accounts or completed tenures, which saw an increase in December 2023, with 20.8 lakh investors withdrawing funds. In FY24 so far, approximately 1.64 crore investors terminated their SIPs, compared to 1.43 crore in FY23 and 1.11 crore in FY22.

Jean Christophe Gougeon, Director and Chief Marketing Officer at Sharekhan by BNP Paribas, attributes the growth of SIPs and their discontinuation to the entry of new players with innovative offerings in the mutual fund space. He notes that the market is witnessing a influx of young entrants seeking quick returns, and while some may exit if immediate gains are not realized, others appreciate the importance of adopting a disciplined approach toward investing via SIP.

December saw open-ended scheme assets reaching Rs 50.80 trillion, up from Rs 48.78 trillion the previous month, with analysts expecting a trajectory toward the targeted aim of Rs 100 lakh crore in the coming years. SIP inflows in December amounted to Rs 17,610 crore, demonstrating the confidence of retail investors. Small Cap funds experienced a substantial inflow of Rs 3,858 crore, while midcap fund inflows declined by 48%. Large Cap funds faced net outflows of Rs 281 crore.

The rise in new SIP registrations amid all-time market highs indicates a growing preference for disciplined investment and underscores investors' trust in this approach. With markets scaling new heights, the choice to adhere to SIPs rather than opting for lump-sum investments showcases a prudent investment strategy and signifies the increasing awareness among investors.

Deepak Jasani, an analyst with HDFC Securities, highlights that the addition of SIPs reflects a surge in new investors entering the equity market, relying on the proven method of creating wealth through SIPs. The continued rise in SIP registrations also suggests that some seasoned investors may be diversifying into midcap and smallcap categories, given the recent uptrend in NAVs of such schemes.

Jasani outlines various reasons behind the discontinuance of SIPs, including the end of tenure, insufficient funds, underperformance of schemes, lack of funds on payment dates, and profit booking amid market correction concerns. He also notes that some SIPs are closed a few months after opening, often to accommodate relationship managers or friends.

Recent data from the Central Depository Service and National Securities Depository has shown a surge in new investors opening demat accounts, with December witnessing the highest monthly additions ever. Over 41.78 lakh demat accounts were opened in December, compared to 27.81 lakh the previous month and 21 lakh a year ago. The total demat tally surpassed 13.93 crore, reflecting a 3.1% increase from the previous month and a substantial 28.66% rise from a year ago.

As investor optimism continues to shape the market landscape, the record-breaking influx of new SIP registrations serves as a testament to the evolving dynamics and growing participation in India's financial markets.

SIP registrations record
Bullish market trends
Investor optimism surge
FY24 SIP trends
Mutual fund landscape
Narendra Modi government policies
BJP-led NDA electoral success
India's $5 trillion economy goal
Retail investor confidence
Financial market participation





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