SIP Growth Story in India
The Systematic Investment Plan (SIP) growth story in India is among the most significant developments in the country’s financial history: a product designed to make mutual fund investing affordable and habit-forming for ordinary savers has grown from negligible volumes in the late 1990s to monthly inflows of over Rs 25,000 crore by early 2025, supported by over 10 crore active SIP accounts. The SIP’s rise transformed mutual fund investing from an event-driven, lump-sum activity of affluent investors into a recurring financial behaviour of the middle class.
What a SIP is
A Systematic Investment Plan is a facility offered by SEBI-registered asset management companies (AMCs) whereby an investor authorises the deduction of a fixed rupee amount from a bank account at a fixed frequency – typically monthly – for automatic investment in a specified mutual fund scheme at the prevailing NAV. The investor receives units at the market price on the date of deduction, with the cost per unit averaging over market cycles (rupee cost averaging).
The minimum SIP amount, historically Rs 500 per instalment, was lowered to Rs 100 by several AMCs following SEBI encouragement in 2021-22, and a few AMCs now offer micro-SIPs of Rs 100 or even lower for digital-native platforms.
Early history (1993 to 2007)
Conceptual origins
The SIP concept was imported from the US mutual fund industry’s systematic investment programme. Indian AMCs began offering SIP facilities from the mid-1990s, primarily as a way to smooth equity market entry for investors deterred by volatility. Franklin Templeton India, Birla Sun Life, and HDFC Mutual Fund were early promoters of SIP as a distinct investor proposition.
Early SIPs used Electronic Clearing Service (ECS) mandates – paper-based instructions to the investor’s bank – which required physical submission, manual processing, and two to three weeks of activation lead time. Failure rates were high due to bank rejections, signature mismatches, and processing delays.
Infrastructure constraints
The absence of a standardised national mandate infrastructure kept SIP adoption limited through the 2000s. Each bank had its own ECS processing timeline. Investors in smaller cities found it difficult to set up SIPs because their bank branches had no ECS tie-up with the relevant AMC’s designated bank. Monthly SIP contributions were estimated at approximately Rs 500-700 crore in 2007-08.
Inflection point 1: NACH and ECS standardisation (2008 to 2013)
National Payments Corporation of India
The establishment of the National Payments Corporation of India (NPCI) in 2008 and the subsequent introduction of the National Automated Clearing House (NACH) in 2012-13 replaced the fragmented ECS system with a standardised, national mandate-processing infrastructure. NACH reduced mandate activation time to five to seven working days and dramatically lowered rejection rates.
AMCs and registrar-and-transfer agents (RTAs) – CAMS and KFin – integrated their SIP registration workflows with NACH, enabling a more automated and scalable mandate processing pipeline. By FY2013-14, monthly SIP contributions had risen to approximately Rs 1,500 crore.
Inflection point 2: Entry load abolition and direct plans (2009 to 2013)
The abolition of entry loads in 2009 reduced the upfront commission that distributors earned on SIP registrations. In the short term this depressed distributor motivation to sell SIPs. However, it also set the stage for fee-based advisers and online platforms to emerge – entities whose revenue model was compatible with SIP (which generates no upfront commission in a no-load regime) rather than dependent on it.
The launch of direct plans in January 2013 created an entire segment of self-directed SIP investors who chose AMC websites and online platforms over distributors, bypassing the commission dependency altogether.
Inflection point 3: Mutual Funds Sahi Hai (2017 to present)
AMFI’s Mutual Funds Sahi Hai campaign, launched in February 2017, was explicitly designed to normalise SIP investing among first-generation investors. Television advertisements featuring the SIP mechanism – regular investing, compounding, long-term wealth creation – were broadcast on mainstream Hindi and regional channels with a frequency and reach unprecedented in the industry’s history.
The campaign is credited with a step-change in SIP registrations during 2017-18. Monthly SIP contribution crossed:
- Rs 4,000 crore: April 2017
- Rs 6,000 crore: December 2017
- Rs 8,000 crore: December 2018
- Rs 10,000 crore: December 2019
SIP data milestones
| Monthly SIP contribution | Date achieved |
|---|---|
| Rs 1,000 crore | circa 2011 |
| Rs 2,000 crore | September 2016 |
| Rs 5,000 crore | July 2017 |
| Rs 8,000 crore | September 2018 |
| Rs 10,000 crore | December 2019 |
| Rs 12,000 crore | January 2021 |
| Rs 14,000 crore | August 2021 |
| Rs 16,000 crore | October 2022 |
| Rs 18,000 crore | March 2023 |
| Rs 20,000 crore | October 2023 |
| Rs 23,000 crore | March 2024 |
| Rs 25,000 crore | early 2025 |
Source: AMFI monthly SIP data.
SIP account count growth
| Period | Active SIP accounts |
|---|---|
| March 2017 | ~1.4 crore |
| March 2018 | ~2.1 crore |
| March 2019 | ~2.6 crore |
| March 2020 | ~3.1 crore |
| March 2021 | ~3.8 crore |
| March 2022 | ~5.4 crore |
| March 2023 | ~6.4 crore |
| March 2024 | ~8.3 crore |
| March 2025 | ~10.7 crore |
Source: AMFI.
Inflection point 4: UPI AutoPay and zero-commission platforms (2020 to 2026)
UPI AutoPay
The introduction of UPI AutoPay by NPCI in 2020 replaced NACH e-mandate as the dominant SIP registration mechanism for new investors. UPI AutoPay allows real-time mandate setup on a smartphone without any bank branch visit, physical form, or waiting period. AMCs and platform aggregators integrated UPI AutoPay into their onboarding flows, reducing SIP activation time from several days to minutes.
Zero-commission platforms
Groww, Zerodha (Coin), Kuvera, Paytm Money, and ET Money collectively acquired tens of millions of users between 2018 and 2024. Their zero-commission, direct plan-only model made SIP investing viable for young investors with low ticket sizes. Groww alone reported over 5 crore registered users by 2024. These platforms accounted for a disproportionate share of new SIP registrations, particularly in the Rs 500-2,000 per month ticket range.
Average SIP ticket size
The average SIP ticket size in India has remained relatively stable at Rs 1,700-2,500 per month, even as the account count expanded. This reflects the addition of first-generation, lower-income investors at the margin, offsetting top-ups by existing investors. AMFI reported an average monthly SIP amount of approximately Rs 2,200 per account in FY2024-25.
SIP discontinuation and persistence
A persistent challenge in measuring the SIP growth story is the discontinuation rate. AMFI reports both gross new SIP registrations and SIP closures in its monthly data. The net addition of active SIPs – registrations minus closures – is the true measure of ecosystem health.
Historically, annual SIP discontinuation rates have ranged from 25% to 40% of existing accounts. The COVID-19 period saw a spike in closures in April-June 2020, though the rate normalised within two quarters. The industry’s ability to grow total active SIP accounts despite high gross discontinuation reflects the extraordinary scale of new registrations driven by platform growth.
Equity vs non-equity SIPs
Most public discourse on SIPs focuses on equity scheme SIPs (diversified equity, large-cap, mid-cap, ELSS). However, a significant minority of SIP accounts are registered in:
- Debt fund SIPs: institutional and HNI investors using SIPs for phased deployment into short-duration or credit-risk categories.
- Hybrid fund SIPs: balanced advantage and aggressive hybrid funds are the second-largest category by SIP count.
- Liquid and overnight fund SIPs: used by corporates for cash management.
The equity SIP account share was approximately 65-70% of total active SIP accounts as of FY2024-25.
SIP and mutual fund AUM: the compounding effect
The significance of SIP for industry AUM growth extends beyond the monthly inflow number. SIP investors, by virtue of the automatic investment mechanism, exhibit materially lower average holding periods relative to lump-sum investors – the investment stays in the fund rather than being redeemed at the first market high. This sticky AUM base reduced redemption pressure during market corrections and provided AMCs with more predictable long-duration capital to deploy.
AMFI has stated that the SIP corpus – the cumulative outstanding value of SIP investments – was approximately Rs 13 lakh crore as of March 2025, representing nearly 20% of total industry AUM.
International comparisons
India’s SIP infrastructure, particularly the NACH/UPI AutoPay mandate system and the AMFI-mandated standard SIP form, is more operationally standardised than the equivalent infrastructure in most emerging markets. Brazil’s Previdencia Privada and China’s fund supermarket platforms share functional similarities but lack the breadth of the direct-to-investor digital distribution that characterises India’s post-2018 SIP growth.
The US 401(k) system’s payroll-linked investment is the closest analogous mechanism for habit-forming periodic investment, though the regulatory architecture and employer nexus are distinct.