Monthly SIPs could double to Rs 50,000 crore in a year’s time: Sunil Subramaniam
Sunil Subramaniam, Market Expert, says if a fund manager is getting, let us say, Rs 1,000 crore per month as SIP, he knows for the next 12 months, he can plan his purchases and so he tracks a good quality stock. He continuously keeps buying it because he is assured of the flow for a long time. The consistency of the SIP book gives a lot of comfort to fund managers also as they can acquire stocks steadily. In effect, fund managers are themselves doing an SIP in the stock market.
Subramaniam also says that Rs 25,000 crore is just the tip of the iceberg. He would not be surprised if this doubles to Rs 50,000 crore in a year's time because the penetration of mutual funds in India is still in single digits in our 144 crore population.
SIP inflows are near record high levels; equity inflows are at three-month high levels, coming in at near Rs 36,000 crore marks. How should one read into this data because in November, we saw real divergent moves in markets?
Sunil Subramaniam: This indicates the maturity of the domestic investor, especially the ones using mutual funds as a vehicle and using distributors to advise them.
We can see that they are planning well. Because of the volatility, largecap flows have dropped and bulk of this Rs 35,000 crore flows have come in the sectoral mid and smallcap.
What it means is that domestic fund managers now have the firepower with them to buy on dips whenever the markets are volatile and I think over the next month or so, until your new earnings season and the Budget proposals come out, the market is going to be in a consolidation phase.
