Systematic investment plan (SIP) inflows in February 2025 could surpass last year’s figures, despite months of market volatility, says Navneet Munot, MD & CEO of HDFC AMC.
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He remains optimistic that net mutual fund flows will also be higher.
It must be noted that over the past 5-6 months, markets have witnessed sharp corrections, yet SIP flows have remained resilient.
“My sense is that the February 2025 SIP number will be higher than February 2024. Investors are staying committed to long-term investing despite volatility,” Munot said.
The rise in SIP inflows comes at a time when many retail investors have realised the benefits of professional fund management. Stocks favoured by individual investors have seen deeper corrections compared to mutual fund NAVs.
“This highlights the role of disciplined investing through funds,” Munot noted.
Mutual fund growth has long-term potential
Despite short-term challenges, Munot sees a bright future for India’s asset management industry. He pointed to the US market, where assets under management (AUM) grew from a few billion dollars in the 1980s to trillions today.
“As India moves from $4 trillion to $30-40 trillion over the next few decades, mutual fund assets will grow in a similar direction,” he said.
Shrinking trading volumes could hit STT collections
While SIP inflows remain steady, stock market trading volumes have declined, raising concerns about tax revenues.
Nithin Kamath, Founder & CEO of Zerodha, recently warned that reduced activity could impact the government’s earnings from the securities transaction tax (STT).
“The activity is more or less concentrated among 1-2 crore Indians. If this continues, the government may collect less than ₹40,000 crore from STT in FY25/26, at least 50% below the ₹80,000 crore estimate,” Kamath said.
He also highlighted a key concern: “Despite the growing market size, participation remains limited, making Indian markets vulnerable to volume shocks.”
(Edited by : Shoma bhattacharjee)
