• Monthly systematic investment plan (SIP) numbers in India surged to a record Rs 24,508.73 crore in September.
• The number of new SIPs registered in September stood at 6,638,857, leading to mutual fund folios reaching an all-time high of 210,515,684.
• The assets under management (AUM) of SIPs reached an unprecedented high of Rs 13.81 lakh crore, despite a 10% drop in inflows into equity schemes.
• The mutual fund industry is predicted to cross the 50-million unique investor base this year, with the investor count projected to reach 100 million by 2030.

The Indian financial sector has witnessed a significant milestone as the monthly systematic investment plan (SIP) numbers surged to an unprecedented Rs 24,508.73 crore in September. This marks a 4% increase from Rs 23,547.34 crore in August, according to data released by the Association of Mutual Funds in India (AMFI).

The increase marks the first instance of SIP contributions crossing the Rs 24,000 crore mark, indicating a robust growth trajectory in the mutual fund industry.

The data further revealed that the number of new SIPs registered in September stood at 6,638,857. This surge in SIP accounts has led to mutual fund folios reaching an all-time high of 210,515,684 in September. The total number of SIP accounts reached a record 98.744 million, up from 96.136 million in August.

The assets under management (AUM) of SIPs also reached an unprecedented high of Rs 13.81 lakh crore. However, despite the growth in SIPs, inflows into equity schemes witnessed a drop of 10% to Rs 34,419 crore in September.

Diversification in Investment Strategies

Inflows into small-cap schemes also saw a slight dip, standing at Rs 3,070 crore compared to Rs 3,209 crore in August. The July-September period saw the AUM of mutual funds surge by a record 12.3% to Rs 66.2 lakh crore, marking the largest quarterly increase in mutual fund assets in the last five years in the country. The average AUM in the April-June period in 2024 was Rs 59 lakh crore.

In addition to the growth in SIPs, the AMFI data also highlighted a record investment of Rs 1.6 lakh crore in debt funds in the period from July to August. This indicates a diversification in investment strategies, with investors not just focusing on equity but also exploring debt funds.

The mutual fund industry has seen a significant increase in participation from investors in smaller cities. The number of new investor folios from these regions has been consistently rising, contributing to the overall growth of the industry.

Predicted Growth and Industry Expansion

Industry experts predict that the mutual fund industry is set to cross the 50-million unique investor base this year, driven by sustained buoyancy in the equity market and a surge in new fund offerings (NFOs). The investor count is projected to reach 100 million by 2030, with Rs 100 lakh crore in total AUM.

This growth in the mutual fund industry is not an isolated event but part of a larger trend. The industry has seen periods of a spurt in retail purchases during previous bull markets, but the flows have been consistent and sticky this time. As investors embrace equities, the share of debt products has been waning amid uncertainty surrounding interest rates and the removal of certain tax breaks.

The mutual fund industry has also seen the entry of new players, taking the total number of fund houses in India to 44. This includes Bajaj Finserv Mutual Fund and Helios Mutual Fund, backed by Singapore-based money manager Samir Arora. BlackRock, too, looks set to return to fund management in India after exiting in 2018.