The Systematic Investment Plan (SIP) stoppage ratio in India crossed 100% last month for the first time in 11 months, driven by heightened market volatility and negative short-term returns. According to data from the Association of Mutual Funds of India, 53.38 lakh SIP accounts were ceased or matured, surpassing the 52.82 lakh new accounts opened during the same period.
In February, the SIP stoppage ratio was at 76%, reflecting that 49.70 lakh accounts were halted while 65.72 lakh new accounts were initiated.
Jeevan Kumar KC, Head of Investment Advisory Services at Geojit Financial Services, noted that a 16% drop in market values over the past two months triggered widespread SIP stoppages. This response was primarily due to dwindling returns from popular SIP categories, including small, mid, and flexi-cap funds over one- to two-year periods. Kumar urged investors to remain composed and consider accumulating more units during downturns to capitalize on the benefits of compounding in bear markets.
In the financial year ending March, the SIP stoppage ratio reached a record high of 95%, as 162.32 lakh accounts were closed following a directive from the Securities and Exchange Board of India (SEBI) to shut down accounts that had been inactive for three consecutive months. During FY25, the industry recorded a stoppage ratio of 76%, resulting in the closure of 514.17 lakh accounts while 679.85 lakh new accounts were established.
Despite increasing stoppages, SIP inflows rose by 21% last fiscal to ₹3.50 lakh crore, up from ₹2.89 lakh crore in FY25.
Looking ahead, markets have shown signs of recovery since the beginning of this month, partly attributed to easing tensions in West Asia. Aditya Agrawal, Chief Investment Officer at Avisa Wealth Creators, stated that the rise in the SIP stoppage ratio is indicative of short-term volatility and the tendency of some investors to pause their contributions in light of recent market corrections, rather than signaling a structural decline in systematic investing.
Although intermittent volatility may persist following the recent market rebound, Agrawal emphasized that India’s enduring growth narrative and positive earnings outlook remain strong. For long-term investors, maintaining SIP contributions during market corrections can help lower average purchase costs and enhance potential returns.
Published on April 18, 2026.
