Mumbai : Systematic Investment Plan (SIP) inflows could double in the next three years, as people are realizing the power of this investment tool, said A Balasubramaniam, managing director and chief executive of Aditya Birla Sun Life AMC. His comments come amid rise in SIP closures as compared to new registrations in the wake of rising volatility in the markets and growing global slowdown.
“SIP as a mode of investment in mutual funds is here to stay, as a headline number More than 13,500 cr shows increase in new registrations, more people coming through MFs…. having said that when another asset class like bank FD or fixed income becomes attractive, we can see some roadblocks can see. But, at the end of the day it is an upward trend and SIP as an asset class will become permanent as far as mutual funds are concerned,” he added.
“we saw Increased flow of Rs 8,000 crore per month Over 13,000 crores, and it could double in the next three years 26,000 crores. More and more people have understood the purpose of SIP and if they invest for the long term, equity gives good returns.”
SIP collections were at a record level 13,573 crore in December, up from 13,306 crores in the last month. However, the stoppage ratio (the percentage of SIPs discontinued to new registrations) increased to 66% last month from 48% in November. The fund managed by Balasubramanian expects higher inflows into debt MFs in 2023, with returns of 7-7.5% against 8-10% from equities and 5-7% from gold.
On the prospects of new-age firms, which have seen a dramatic fall in valuations from last year’s highs, he said: “There is huge scope for startups to flourish, given that India is becoming a digital economy, whether be it in payments, or in consumer behaviour. We are of the view that some of these companies have been able to establish themselves as strong players in particular segments and have taken care of the competitive intensity in those segments. In five years some companies are showing a path to profitability, and can be valued more based on the earlier metrics of revenue, or profits, rather than the number of users or transactions.”
According to him, the stock market can be divided into secular growth stories, cyclical growth stories—domestic-cyclical versus global-cyclical—and new-age companies, which are further divided into growth-oriented topline-driven companies versus bottomline-driven companies. can be divided.
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