Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch has informed that the capital markets regulator is working in tandem with mutual fund houses to bring down the minimum investment requirement under the systematic investment plans (SIPs). Madhabi Puri said that she asked some of the mutual fund houses whether an SIP of Rs 500 per month was viable for them. She later said that an SIP of Rs 250 per month was worth exploring if it was not possible to bring down the cost of an SIP to Rs 100 per month.
“Now we are working with them (mutual funds) to see where is that cost, what can Sebi do to facilitate making it possible to bring that viability down to Rs 250 a month, because then it is the equivalent of what Hindustan Unilever did with shampoo sachets. You just explore the market and you just grow the market,” the Sebi boss said at Business Today’s Most Powerful Women (MPW) 2023 event.
She hailed mutual fund SIPs as a great tool of financial inclusion. “In the external marketplace, I think the most important piece that I would like to see happening is greater financial inclusion and a simple example of that is a conversation that I had with some of our mutual funds for instance because that’s a great product for financial inclusion,” she said.
The first woman chairperson of Sebi further noted that smaller-range SIPs will provide a massive push to the capital markets and aid in the financial inclusion agenda. Buch also said that despite foreign investors selling Indian equities due to the US Federal Reserve’s liquidity tightening measures.
She also explained that, unlike other emerging market economies, the Indian markets were still resilient because Indian retail investors pitched in both through direct investment and investments via mutual funds.
“You know what happened because the market remained resilient is that our share in the global indices went up. The people who left India started underperforming their benchmark index because we were roaring thanks to the domestic demand and they had left. So, they were missing out on the Indian returns and very soon they came back because they could not afford to miss out on the Indian returns,” she mentioned.
She added that this had a double impact as more domestic investment started coming in and foreign money started returning to the Indian markets because “they couldn’t afford to miss the India story.”
The mutual fund industry logged its highest-ever monthly investments via SIPs in November this year. Mutual fund investments via systematic investment plans hit a historic high of Rs 17,073.30 crore as of November. The number of SIP accounts rose by 1.41 million to 74.41 million in November.
SIP assets under management (AUM) also rose from Rs 8.59 lakh crore in October to Rs 9.31 lakh crore in November, according to the Association of Mutual Funds of India (AMFI) data.
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