The investment landscape experienced a historic surge in systematic investment plan (SIP) registrations in December, with a record-breaking 40.32 lakh individuals joining the trend. This marked a significant 31% increase from the previous month and an impressive 73.5% surge compared to the same period last year. The Association of Mutual Funds in India (AMFI) notes that the consistent monthly growth of 30 lakh fresh additions since July has driven SIP registrations for FY24 above the combined figures for FY23 and FY22.
Analysts attribute this remarkable surge to growing investor confidence in India's macroeconomic fundamentals and the anticipation of potential interest rate cuts by central banks in the coming year. The recent electoral success of the BJP-led NDA in state elections, especially in the Hindi heartland, has further strengthened faith in the continuation of policies led by Prime Minister Narendra Modi's government. This bodes well for the Indian economy, particularly if the NDA regime secures a third consecutive term, with favorable government policies expected to contribute to reaching the $5-trillion economic goal.
Several brokerages have recently raised their Nifty targets for 2024, with Nomura projecting the benchmark index at 24,260 and ICICI Direct forecasting Sensex at 83,000 and Nifty at 25,000 by the end of 2024.
On the flip side, December 2023 witnessed an increase in discontinued SIP accounts, with 20.8 lakh investors withdrawing funds. In FY24 so far, 1.64 crore investors have terminated their SIPs, compared to 1.43 crore in FY23 and 1.11 crore in FY22. Despite these withdrawals, the overall SIP scenario remains robust, reflecting positive sentiments towards the economic outlook and the investment climate in India.
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