Seeing the rising investments in systematic investment plans, Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch talked about how the regulator is working with mutual funds to bring down the minimum costs of SIPs.
SIPs in mutual funds are showing tremendous growth in the last couple of years, the systematic investments of ₹500 are made viable but there is no option to explore SIPs of ₹250, which could lead to more inclusion in the market.
“We are working with them (MF industry) to see where is the cost, what can Sebi do to facilitate making it possible to bring that viability down to ₹250 a month, because then it is the equivalent of what Hindustan Lever did with shampoo sachets. You just explode the market,” Buch said while speaking at an event hosted by Business Today.
The Indian capital markets will get a massive push through smaller range SIPs, and the sachetisiation of the market will help the financial inclusion agenda of the country, the Sebi chairperson said.
These remarks come shortly after the mutual fund industry reported its highest-ever monthly investments through SIPs at over ₹17,000 crore for November. Despite foreign investors selling Indian equities, the market didn’t collapse because Indian investors held down the fort, Buch said.
She said, “In effect, the benefit of our domestic flows and the retail flows had a double impact. The impact of them coming in and the impact of the foreign money returning because they couldn’t afford to miss the Indian story.”
SIPs hit a new high in November
The number of systematic investment plans (SIPs) hit an all-time high in November of this year, recorded at a whopping ₹17,000 crore. The SIP investments in November 2023 surpassed the October figure of ₹16,928 crore, according to AMFI data.
The sachetising of SIPs may further boost these figures, especially amid expectations of an aggressive entry by the Reliance Group entity Jio Financial Services into the MF space.