India’s mutual fund industry is displaying signs of robust growth alongside notable challenges, with unprecedented monthly inflows into systematic investment plans (SIPs) accompanied by increasing account discontinuations.
Data from the Association of Mutual Funds in India (AMFI) reveals that SIP inflows climbed to ₹32,087 crore in March 2026, marking a 7.5% increase from ₹29,845 crore the previous month. This rebound follows a slight decline in February. The count of active SIP accounts has grown to 9.72 crore, highlighting a growing preference for investment options tied to market performance, especially in smaller urban areas.
However, the sector faces elevated turnover. The SIP discontinuation rate, which compares closed or matured plans to new ones, rose to 76%.
Although new registrations totaled 65.7 lakh, around 50 lakh SIPs were halted or ended. This trend may stem from several factors, including:
– Realizing profits as the fiscal year concludes.
– Maturity of plans initiated during the 2023-24 market surge.
– Investor prudence amid market fluctuations, such as the drop in Nifty IT and rising geopolitical issues in West Asia.
Overall assets under management (AUM) for the industry fell to ₹73.73 lakh crore from a February high of ₹82.03 lakh crore. This reduction was largely due to substantial withdrawals from debt funds, amounting to nearly ₹2.95 lakh crore, a common occurrence at fiscal year-end when companies manage cash for taxes and financial reporting.
In contrast, equity funds performed strongly, drawing net inflows of ₹40,450 crore, with particular demand for flexible and small-cap options.
