Govt Launches ₹60,000 Cr Plan to Upgrade ITIs, Skill 2 Million Youth; Big Corporates Join In
SIP Stoppage in January 2025

The Indian mutual fund industry has seen a significant spike in SIP (Systematic Investment Plan) cancellations, with the stoppage ratio jumping to 109% in January, a sharp rise from 82.73% in December and 60.72% in September. This indicates that more investors are discontinuing their SIPs than new registrations, raising concerns about shifting sentiment towards equity investments. While some experts believe this is a short-term reaction to market volatility, others fear it could signal a broader trend of investor caution.

The Indian stock market has been struggling over the past six months, with the Nifty 50 down nearly 5% and the Sensex falling around 4%. More concerning is the performance of broader indices like the BSE MidCap and SmallCap, which have entered bear market territory after declining nearly 20% from their recent highs. Market instability and concerns over valuations have added to investor unease, potentially prompting many to reassess their investment strategies.
The increase in SIP stoppages comes at a time when social media discussions have fueled skepticism about SIPs, particularly in the mid and small-cap space. Some fund houses have intensified their messaging, urging investors to stay committed to long-term investment goals despite market downturns. However, the rising number of discontinued SIPs suggests that many investors are not heeding this advice. Data from the Association of Mutual Funds in India (AMFI) reveals that investor exits and tenure-ended accounts surged to 61.33 lakh in January from 44.90 lakh in December, while new SIP registrations only saw a slight increase to 56.19 lakh from 54.27 lakh. SIP inflows also witnessed a marginal dip, slipping to ₹26,400 crore from ₹26,459 crore in December.
Industry experts have expressed mixed views on the trend. Aashish Somaiyaa, CEO of WhiteOak Capital AMC, called the rising stoppage ratio a concern, cautioning that further acceleration could occur in February. He stressed that fund houses have a responsibility not only to manage investments but also to educate and reassure investors, particularly during volatile periods. On the other hand, Sachin Jain, Managing Partner at Scripbox, argued that it is too early to declare a long-term trend, attributing the recent decline in SIPs to a temporary drop in demand caused by factors like inflation and lower consumer confidence. He advised investors to reassess their asset allocation and adopt a slightly conservative approach while remaining optimistic about future returns.
Despite the dip, some industry analysts remain positive. Juzer Gabajiwala of Ventura Securities noted that SIP stoppages typically rise during market downturns as investors panic. Given that markets have remained largely stable over the past few years, stoppages had been relatively low. Now, with a larger SIP base, the absolute numbers appear higher, though the impact remains limited.
AMFI has also downplayed concerns, stating that the drop in SIP inflows was marginal and largely due to a reconciliation process between exchanges and RTAs, which resulted in the closure of nearly 25 lakh inactive accounts. AMFI chief Venkat Chalasani explained that SEBI had mandated the closure of SIP accounts that had been inactive for more than three months, leading to a one-time clean-up. Without this adjustment, SIP accounts would have shown positive growth of 20–25 lakh in January.
Additionally, SEBI has introduced 'MITRA' (Mutual Fund Investment Tracing and Retrieval Assistant), a new platform designed to help investors trace and recover unclaimed or inactive mutual fund folios. This initiative is expected to improve transparency and strengthen investor confidence in mutual funds.
While the recent rise in SIP cancellations may appear alarming, many experts believe it reflects temporary concerns rather than a fundamental shift in investor behavior. As market volatility stabilizes and economic conditions improve, SIP inflows are likely to regain momentum. For long-term investors, staying committed to disciplined investing remains the key to navigating short-term fluctuations and achieving financial goals.
Source: (Association of Mutual Funds in India), expert insights from Aashish Somaiyaa (CEO, WhiteOak Capital AMC), Sachin Jain (Managing Partner, Scripbox), and Juzer Gabajiwala (Ventura Securities)
- Flat ₹20 Brokerage
- Next-gen Trading
- Advanced Charting
- Actionable Ideas
Trending on 5paisa
02
5paisa Capital Ltd
Indian Market Related Articles
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.