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Chandigarh: Systematic Investment Plans (SIPs) in India have witnessed unprecedented growth over the past 18 months, reflecting a deepening retail participation in the mutual fund industry. According to Kailash Kulkarni, CEO of HSBC Mutual Fund, this surge in SIP inflows is not a passing trend but a fundamental shift in the way Indian investors are approaching wealth creation and long-term financial planning.
SIP inflows have steadily climbed from ₹26,632 crore in April 2025 to a record ₹29,361 crore in September 2025. What is even more significant is that the half-yearly contribution levels have consistently surpassed previous records, raising a key question: Is this the peak, or will the trend continue to grow further? Kulkarni believes the momentum is here to stay, driven by structural changes in investor behavior, accessibility of financial products, and increasing financial literacy across the country.
Why SIP Investments Are Gaining Ground
Kulkarni explained that SIPs have evolved into the preferred mode of investment for millions of Indians, particularly due to their disciplined nature and ability to create long-term wealth through rupee-cost averaging and compounding benefits.
“In April 2024, SIP inflows were around ₹20,371 crore. In just 18 months, inflows have grown by roughly ₹9,000 crore. This is not just incremental growth—it signifies a strong and sustained rise in investor confidence,” he said.
Two Factors Driving Growth
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Financial Awareness & Discipline: Investors are increasingly viewing SIPs as a long-term wealth-building tool rather than a short-term market-dependent investment.
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Investor Advocacy: Existing investors, satisfied with their SIP journey, are recommending SIPs to friends and family, creating a positive word-of-mouth ecosystem.
Retail Participation Beyond Metro Cities
One of the strongest indicators of sustained growth is the increasing contribution from beyond the top 30 cities. Approximately 60% of new SIP registrations are originating from smaller cities and semi-urban regions, showcasing that retail penetration is no longer limited to India’s metro hubs.
Kulkarni highlighted that investors from smaller towns often start with modest SIP amounts. Over time, as their confidence builds with market performance and returns, they increase their contributions through SIP top-ups or by opening multiple SIPs.
“The democratization of mutual funds has begun. With digital platforms and simplified onboarding processes, even first-time investors from Tier-2 and Tier-3 cities are embracing SIPs,” he noted.
How Market Volatility Impacts SIP Behavior
Despite concerns about market corrections or overvaluation, SIP investors are largely unfazed. Kulkarni remarked that long-term investors focus more on financial goals—such as retirement, children’s education, and wealth creation—than short-term market fluctuations.
He added that while younger investors may pause SIPs due to temporary trends or speculative market movements visible on fintech apps, seasoned investors remain committed. SIP stoppages also occur due to personal reasons such as family emergencies or after meeting specific financial milestones.
Interestingly, while SIP inflows are on a strong upward trajectory, overall equity mutual fund inflows have seen some decline. Kulkarni attributes this to cautious sentiment amid global uncertainty, flat equity performance in certain months, and the rising appeal of alternative assets like gold.
Will the Momentum Continue? HSBC Says Yes
Kulkarni is optimistic that SIP inflows will continue to rise, supported by:
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Increasing investor trust and financial discipline
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Broader inclusion of small cities and rural areas
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Growing preference for long-term wealth creation
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Positive historical performance despite market volatility
He emphasized that SIPs have emerged as a hedge against emotional investment decisions, providing stability and consistency even during uncertain economic periods.
“SIPs are not just an investment option—they have become a financial habit. And habits, once ingrained, lead to sustainable growth,” Kulkarni concluded.
What This Means for Investors
For first-time investors and seasoned participants alike, the data signals strong confidence in the Indian growth story. With mutual fund penetration still relatively low compared to global markets, the potential for future expansion remains immense. Financial advisors recommend that investors stay invested, use SIP top-ups during income growth phases, and remain disciplined to take full advantage of compounding.
The record SIP inflows are a reflection of a maturing investment culture in India—one that values long-term planning over short-term speculation. As financial literacy improves and investment becomes more accessible, the mutual fund industry is expected to see sustained retail inflows, solidifying SIPs as a cornerstone of personal finance in India.
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