Positive effect of Corona: Lockdown saves crores of rupees including hotel, restaurant and traveling which people get higher returns by investing through SIP
- In 2021, SIPs invested 26% more in the stock market than FIIs
- In terms of investment, small investors are giving foreign funds a run for their money
- SIP returned 45-81% in one year and 15-22% in 10 years
Indian stock markets are booming. The benchmark Sensex has crossed the 60,000 point mark and the Nifty has crossed the 18,000 point mark. It is believed that the ups and downs of Indian stock markets are due to foreign investors. However the situation has changed since Corona. Market analysts say that small investors are a major contributor to the current boom in the stock market.
Systematic Investment Plans (SIPs) for equity investments have risen sharply, according to stock market insiders. Investment in SIPs is much higher than investment by foreign institutional investors (FIIs). In the calendar year 2021, FII's net investment is Rs. 64,273 crore, against which Rs. 81,187 crore has been invested.
The Indian stock market is no longer dependent on foreign investors
Sanjay Shah, chairman and managing director of Prudential Corporate Advisory Services Limited, told Divya Bhaskar that SIP investment is much higher than foreign institutional investment at present and therefore Indian markets do not need to be completely dependent on foreign inflows. SIPs have now become a means of supporting local equity markets. SIP has increased since the lockdown. For the first time in September, 2021, the monthly SIP investment was Rs. 10,000 crore. More and more retail investors are opening new accounts. About 26.8 lakh new SIPs were registered in September alone, up from 14.08 lakh new SIPs in April, 2021.
In 2021, SIPs invested 26% more in the stock market than FIIs
In terms of investment, small investors are giving foreign funds a run for their money
SIP returned 45-81% in one year and 15-22% in 10 years
Indian stock markets are booming. The benchmark Sensex has crossed the 60,000 point mark and the Nifty has crossed the 18,000 point mark. It is believed that the ups and downs of Indian stock markets are due to foreign investors. However the situation has changed since Corona. Market analysts say that small investors are a major contributor to the current boom in the stock market.
Systematic Investment Plans (SIPs) for equity investments have risen sharply, according to stock market insiders. Investment in SIPs is much higher than investment by foreign institutional investors (FIIs). In the calendar year 2021, FII's net investment is Rs. 64,273 crore, against which Rs. 81,187 crore has been invested.
Investment through SIPs is more stable and regular
Sanjay Shah said there has been no consistency in FPI investment in the last few years. While this flow has been high in some years, sales of foreign funds have also been seen in some other years. On the other hand, investment through SIPs is more stable and regular and has helped to reduce market volatility to some extent. Due to this, Indian markets are getting good support from local investors.
Reference: Prudent Corporate Advisory
* April-September investment
Investment Rs. In the spine
What is SIP?
Systematic investment plans or SIPs in common parlance are a means by which investors can invest a fixed amount in a mutual fund scheme at regular intervals. Investors invest Rs. SIPs can start with as small as 500. SIP is a convenient method of investing in mutual funds by giving standing instruction of debit in a person's bank account.
An average growth of 25% in small investor investment
Nomura India said in a recent client note that the total investment inflow in SIP was Rs. 10,400 crore and is growing at an extraordinary rate. The fourth quarter of fiscal year 2020-21 saw an average growth of 25% in small investor investment. We have seen an increase in SIP accounts over the last eight months and the trend is getting stronger. The last 3 to 4 months have seen a 3.5% increase in SIP accounts (as a percentage of book openings) on a monthly basis.
Lockdown reduced people's costs and increased investment
Manish Mehta, head of sales and marketing at Kotak Mahindra Asset Management Company, said the cost of people coming to Kovid Lockdown last year was much lower. Expenses including hotels, restaurants and traveling were closed, which led to increased savings. During this time the market rallied and their portfolios saw encouraging returns, which led to their savings being converted into investments. People have started investing in mutual funds through SIPs. Millions of new investors have arrived in the last one year.
Read News article in Gujarati
The largest returns were in smallcap funds
According to figures provided by Kotak Mahindra Asset Management, those who have invested in a systematic investment plan have seen returns ranging from 45.87% to 81.26% in the last one year alone. The highest returns are found in smallcap funds. If you look at the figure of return on investment, the return is 19-25% in five years and 15-22% in 10 years.
Getting more returns compared to others
Rasesh Upadhyay, co-founder of Ashwamegh Ventures Pvt Ltd, said small savings schemes are getting lower returns than before. In contrast, the five-year average return on SIP is around 15-17%. At the same time, young investors in the age group of 25-30 are coming to invest heavily in the market through SIPs. Investment is also coming through SIPs from smaller centers.
People's attraction towards the stock market increased
Indian stock markets have been booming for the last one and a half years. As the Bombay Stock Exchange (BSE) index Sensex crossed 60,000 points, people's attitude towards the stock market has changed. Investor attraction has also increased following the rally in the market. As on October 22, the number of investors registered on the BSE has reached 8.38 crore. Over the past one year, 2.78 crore new investors have entered the Indian stock market. According to this, more than 1 lakh new investors are being added to the market every day. The number of investors has increased by 50% during the last one year.
