Is the SIP boom over? Retail investors pull back as AUM slides by ₹1.43 lakh crore

The Indian stock market has experienced remarkable growth since the onset of the Covid-19 pandemic, driven largely by an unprecedented surge in retail investor participation. Historically, Indian investors were known for their conservative approach, favouring traditional asset classes such as fixed deposits and gold. However, post-Covid, a significant shift occurred as retail investors flocked to equity markets, primarily through the Systematic Investment Plan (SIP) route. This surge in retail participation provided stability to Indian stock indices, even as foreign institutional investors (FIIs) consistently sold off their holdings. However, recent data from the Association of Mutual Funds in India (AMFI) suggests that retail enthusiasm for equities may be waning.

Declining SIP Assets Under Management (AUM)
One of the most concerning trends observed in recent months is the decline in SIP Assets Under Management (AUM). At its peak in September 2024, SIP AUM stood at ₹13.81 lakh crore. However, as of March 2025, it has fallen to ₹12.38 lakh crore—a reduction of ₹1.43 lakh crore in just six months. This decline is a direct consequence of falling stock market, increasing discontinuation of SIPs and a reduction in monthly contributions by investors. Also, the total number of outstanding SIP accounts has reduced from a record high of 10.32 crore in December 2024 to 10.16 crore at the end of February 2025.

The rate at which SIPs are being discontinued is alarming. In both January and February 2025, the number of SIP closures outpaced new registrations. According to AMFI data, February 2025 witnessed 54.7 lakh SIPs being discontinued, while only 44.56 lakh new SIPs were registered. This resulted in a net reduction of 10.2 lakh SIPs. The trend was similar in January, with 61.33 lakh SIPs discontinued against 56.19 lakh new SIP registrations, leading to a net decline of 5 lakh SIPs. The fact that the net reduction in February (10.2 lakh) was double that of January (5 lakh) indicates a growing reluctance among retail investors to continue investing in equities.

In addition to the monthly reduction in active SIP accounts, monthly SIP contributions have also been on a downward trajectory. In February 2025, SIP contributions stood at ₹25,999 crore, down from ₹26,400 crore in January—a decline of ₹401 crore. Furthermore, January’s SIP contributions were lower than those in December 2024 (₹26,459 crore), highlighting a persistent downtrend in retail inflows.

Despite recent reversals, SIP contributions in the eleven months of the current fiscal have reached a record ₹2.63 lakh crore, mainly due to heavy inflows in the first half of the current calendar year. Between April 2024 and September 2024, SIP AUM increased from ₹11.26 lakh crore to ₹13.81 lakh crore. However, since then, there has been a consistent slide in SIP AUM, which currently stands at ₹12.37 lakh crore.

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