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Yash Agarwal

← ResearchResearch7 min read

The SIP machine: how ₹32,000 crore a month changed India's market

Monthly SIP money has grown almost four times since 2020, and it now steadies the market when foreign investors sell. How it works, who invests, and where the risks are.

Indians now put ₹32,297 crore a month into mutual funds through SIPs, nearly four times the 2020 level. A simple look at how SIP money became the market's steadiest buyer, whether SIPs work, and what could go wrong.

A SIP, or systematic investment plan, is an instruction to put a fixed amount into a mutual fund every month. A mutual fund collects money from many people and invests it for them. For example, it can buy shares, which are small pieces of companies. Once you set up a SIP, the money moves on the same date every month. You do not have to decide when to buy or how much.

In August 2026, SIPs moved a record ₹32,297 crore into mutual funds from about 10 crore SIP accounts.1 That steady monthly flow has become one of the most important forces in India’s stock market.

How big it got

Money invested through SIPs each year (₹ thousand crore)
0100200300400FY19FY20FY21FY22FY23FY24FY25FY26SIP contributions, FY19: 92.7SIP contributions, FY20: 100.1SIP contributions, FY21: 96.1SIP contributions, FY22: 124.6SIP contributions, FY23: 156SIP contributions, FY24: 199.2SIP contributions, FY25: 289.4SIP contributions, FY26: 349.6

Gross SIP contributions. The financial year runs April to March.Source: AMFI data

In the financial year 2019-20, or FY2019-20, SIPs brought in about ₹8,300 crore a month. By August 2026 it was ₹32,297 crore, nearly four times as much.2 Over the full year FY2025-26, SIPs brought in about ₹3.5 lakh crore.

The yearly total has fallen only once, in FY2020-21, the Covid year. Even then, the drop was just 4%. The number of registered SIP accounts grew from 3.1 crore in March 2020 to 10.75 crore in August 2026.3 About 10 crore of them made a payment in August. The money built up through SIPs is now worth ₹18.62 lakh crore. That is about a fifth of all the money in Indian mutual funds.1

Who invests

  • Many more people invest now. In March 2021, India had 2.3 crore unique mutual fund investors. By March 2026, there were 6.1 crore.4 Here, unique means each person counts once, however many funds they own.
  • The average SIP is small. It works out to about ₹3,200 a month per account.
  • More women are investing. They make up 26% of mutual fund investors.
  • People outside the top 30 cities now hold 28% of all the mutual fund money owned by individuals. About two thirds of the mutual fund money from those areas is in equity funds, which invest in shares.

The market’s new floor

Domestic institutions are big Indian investors, such as mutual funds and insurance companies. As recently as 2020, they were net sellers of Indian shares, which means they sold more than they bought. Equity mutual funds also had money flowing out of them for eight months in a row.5 Since then, domestic institutions have become net buyers.

Net buying of Indian shares (₹ lakh crore)
  • Domestic institutions
  • Foreign investors
-20246810FY22FY23FY24FY25FY26Domestic institutions, FY22: 2.2Domestic institutions, FY23: 2.5Domestic institutions, FY24: 2.0Domestic institutions, FY25: 5.0Domestic institutions, FY26: 8.1Foreign investors, FY22: -1.4Foreign investors, FY23: -0.4Foreign investors, FY24: 2.1Foreign investors, FY25: -1.3Foreign investors, FY26: -1.8

Domestic institutions include mutual funds, insurers, banks and pension funds. Negative means net selling.Source: AMFI-Crisil Factbook 2026; NSDL

Foreign investors are funds and other investors from outside India. In FY2025-26, they sold more Indian shares than they bought, by ₹1.81 lakh crore. Domestic institutions did the opposite and bought more than they sold, by a record ₹8.09 lakh crore. Mutual funds made up about two thirds of that buying.6 SIPs are the steadiest source of that mutual fund money.

You can see the floor at work in the worst months. In October 2024, foreign investors sold ₹94,017 crore of Indian shares, a record at the time. Domestic institutions bought ₹1.07 lakh crore that month. In March 2026, foreign investors broke that record by selling ₹1.18 lakh crore. The Nifty 50, an index that tracks the share prices of 50 large Indian companies, fell 11% in the month. Domestic institutions bought ₹1.43 lakh crore, and SIP money that month hit a new high.7

This buying and selling has changed who owns the market. In the three months to March 2025, domestic institutions owned 17.62% of the companies listed on the National Stock Exchange (NSE). Foreign investors owned 17.22%. It was the first time in Prime Database’s records that domestic institutions owned more. By June 2026, the gap had grown: domestic institutions owned 19.15% and foreign investors 15.88%. Foreign investors’ share was the lowest in 14 years.8

Does SIP investing work?

An index fund buys the shares that make up an index, so its value rises and falls with the index. One real example is an HDFC index fund that tracks the Nifty 50. Say you put ₹10,000 into it on the first working day of every month.9 The table shows what that would have been worth on 31 August 2026.

SIP of ₹10,000 a month for You put in Worth on 31 Aug 2026 Return a year
15 years ₹18.0 lakh ₹45.7 lakh 11.5%
10 years ₹12.0 lakh ₹21.3 lakh 11.0%
3 years ₹3.6 lakh ₹3.75 lakh 2.7%
1 year ₹1.2 lakh ₹1.18 lakh -3.4%

Over 10 years, the money put into this simple index SIP grew to about 1.8 times as much. Over 15 years, it grew to about 2.5 times as much. In both cases, that is about 11% a year. But over the last three years it earned almost nothing, because markets have stayed flat or fallen since late 2024. SIPs work, but slowly, and only if you stay long enough.

Where the risks are

  • Most SIP investors are new. At least 6 in 10 of today’s mutual fund investors joined after March 2021. Only 31% of SIP money has stayed invested for more than five years.10 Most of these investors have seen only short, small market falls. In a bear market, share prices fall a lot. The last long bear market was in 2008, when the Nifty 50 lost about half its value.11
  • New sign-ups slow down when markets fall. A correction is a smaller fall than a bear market. In the 2024-25 correction, monthly SIP money dipped only about 2%. But new SIP sign-ups fell by more than a quarter.12 In early 2025, scary headlines said SIPs were being stopped. Most of those stops came from a one-time clean-up of about 1.4 crore dormant (inactive) accounts. Investors were not rushing to leave.
  • Money also flows out. In FY2025-26, investors took money out of their SIP holdings. These withdrawals cancelled out about 45% of the money that came in through SIPs. That left net SIP money, meaning money in minus money out, at about ₹2 lakh crore.12
  • Riskier funds are getting more of the SIP money. Small-cap and mid-cap funds buy shares in smaller companies. Large-cap funds buy shares in big ones. In August 2026, small-cap and mid-cap funds received 30% of all SIP money, while large-cap funds lost SIP accounts.12

Footnotes

  1. AMFI, Monthly Note, August 2026: SIP contributions of ₹32,297 crore, 10.02 crore contributing SIP accounts and SIP assets of ₹18.62 lakh crore (21.4% of industry assets). AMFI’s headline SIP figures include SIPs into domestic fund-of-funds. ↩ ↩2

  2. Annual SIP contributions from AMFI data, as reported by AMFI monthly notes, PTI and Business Standard, and IIFL. The ₹8,300 crore monthly figure for FY2019-20 is my arithmetic from the annual total of ₹1,00,084 crore. ↩

  3. March 2020: PTI via Business Standard, 10 April 2020, citing AMFI. August 2026: AMFI monthly report, outstanding SIP accounts. ↩

  4. AMFI-Crisil, Mutual Fund Factbook 2026, and AMFI, Investor Trends, July 2026. The average SIP size is my arithmetic: August 2026 SIP money divided by contributing accounts. ↩

  5. Domestic institutions’ net selling in calendar 2020 from stock exchange provisional data; equity mutual fund outflows from July 2020 to February 2021 from AMFI data, as reported by Business Standard, 11 April 2021. ↩

  6. AMFI-Crisil Mutual Fund Factbook 2026 (net equity buying by domestic institutions and by mutual funds, FY2021-22 to FY2025-26) and NSDL (foreign portfolio investors). NSDL’s foreign figures include money invested through IPOs. ↩

  7. NSDL foreign portfolio investment data; domestic institutional buying from stock exchange provisional data; Nifty move and March 2026 SIP figure from the AMFI Monthly Note, March 2026. ↩

  8. Prime Database, as reported by ThePrint, 2 May 2025, and Punjab Kesari, 4 August 2026. ↩

  9. HDFC Mutual Fund, Index Solutions Factsheet, August 2026: HDFC Nifty 50 Index Fund, regular plan, growth option. Returns are XIRR. One fund, not an average of all funds, and past returns do not predict future ones. ↩

  10. AMFI-Crisil Mutual Fund Factbook 2026. The “at least 6 in 10” is my arithmetic: unique investors grew from 2.3 crore in March 2021 to 6.14 crore in March 2026. ↩

  11. Nifty 50 index levels, Nifty Indices historical data: the index fell 51.8% in calendar year 2008. ↩

  12. New registrations and the account clean-up: AMFI data as analysed by IIFL. Net SIP money: SEBI annual report, as reported by Business Standard, 9 September 2026. Small-cap and mid-cap share: my arithmetic from AMFI’s August 2026 monthly report. ↩ ↩2 ↩3