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The Systematic Investment Plan (SIP) stoppage ratio hit an all-time high of 123% in February 2025. This means that for every 100 new SIPs registered, 123 were either discontinued or completed.
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This marks the second straight month where more SIPs were stopped than started.
In January, the ratio was 109%, and in December, it was much lower at 83%.
So, what is SIP stoppage ratio?
The SIP stoppage ratio refers to the percentage of systematic investment plans (SIPs) that are discontinued or completed in a given month compared to new SIPs registered.
A higher ratio indicates that more investors are stopping their SIPs than starting new ones.
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Why are more investors stopping SIPs?
Market conditions play a key role.
Over the past six months, benchmark indices have been under pressure. The Nifty 50 has dropped 11%, while the BSE Sensex is down about 10%.
When investors see negative one-year returns, they tend to pause or stop SIPs.
Alekh Yadav, Head of Investment Products at Sanctum Wealth, explained:
"The SIP stoppage ratio surged to 123% in February 2025. This trend was anticipated, as investors often react to negative one-year returns by halting or choosing not to renew their SIPs. However, with the market having corrected significantly from its peak and now trading at valuations closer to fair value, we believe investors should consider continuing their SIP investments. That said, mid and small-cap segments may still face some downside, so investors with a shorter time horizon may want to wait before investing in these areas."
Impact on SIP inflows
Despite the rising stoppage ratio, SIP inflows stood at ₹25,999 crore in February, slightly lower than ₹26,400 crore in January.
The number of active SIP accounts was 44.56 lakh, while discontinued accounts rose to 54.70 lakh.
AMFI Chief Executive Venkat Chalasani noted that while market corrections impacted overall AUM, investor participation remained stable.
"The Indian mutual fund industry continues to demonstrate resilience, with consistent investor participation across categories. Despite market fluctuations, net inflows stood at ₹40,063 crore, reflecting investor confidence in long-term wealth creation," he said.
Should investors worry?
Financial experts suggest that investors should continue SIPs, particularly in large-cap funds, as markets are now trading closer to fair value.
However, caution is advised in mid and small-cap segments, which may still face further corrections.
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