SIP Stoppage Ratio Drops to 73% in May After April Surge

Market Performance

The SIP (Systematic Investment Plan) stoppage ratio saw a sharp decline in May 2025, dropping to 73% after hitting nearly 300% in April. This indicates a significant improvement in investor participation, as new SIP registrations outpaced stoppages.

• New SIPs in May: 0.59 Crore
• SIPs Stopped/Matured: 0.43 Crore
• April 2025 Comparison:
  • New SIPs: 0.46 Crore
  • Stopped/Matured SIPs: 1 Crore

A stoppage ratio below 100% signals positive growth, reflecting renewed investor confidence in mutual funds.

Key Insights on SIP Trends

1. Recovery After Regulatory Adjustments

The earlier spike in SIP stoppages was attributed to SEBI's reconciliation process, which resolved discrepancies between Registrars and Transfer Agents (RTAs) and exchanges. AMFI confirmed that the process was completed, leading to more accurate May figures.

2. Record-High SIP Inflows

• May 2025 SIP Inflows: ₹26,688 Crore (up 0.21% from April)
• SIP AUM (Assets Under Management): ₹14.61 lakh Crore (vs. ₹13.90 lakh Crore in April)
• Share in Mutual Fund AUM: 20.24% (up from 19.9%)

3. Growing Investor Preference for SIPs

• Active SIP Accounts: Increased from 8.38 Crore to 8.56 Crore
• Industry experts highlight SIPs as the preferred investment route over lump-sum payments.

Why the SIP Stoppage Ratio Matters?

The SIP stoppage ratio measures the ratio of discontinued SIPs to new registrations, serving as a key indicator of investor sentiment.

• High stoppages may indicate financial stress or declining confidence.
• A low ratio suggests sustainable inflows and stable participation.

Summary

The SIP stoppage ratio's drop to 73% in May marks a recovery from the extreme levels seen in April. With record SIP inflows and increasing AUM, the mutual fund industry shows resilience. Regulatory clarity and growing investor trust reinforce SIPs as a favored long-term investment strategy.