The net inflows into the systematic investment plans (SIPs) in May 2020 stood at ₹8,123 crore, only marginally lower than the ₹8,376 crore recorded in April. The SIP inflows seemed to have held up despite an economic shock caused by the nationwide lockdown.
However, a detailed analysis of the number suggests that bounced SIPs may not have been factored in. The difference due to SIP bounce may be in the region of ₹4,000 crore. An SIP ‘bounce’ is a failure to debit the customer’s bank account for a scheduled SIP due to insufficient balance. Such a bounce in some cases attracts charges from banks.
In a media presentation last month, Aashish Sommaiyaa, MD and CEO, Motilal Oswal AMC suggested that the AMFI monthly flow data should be crosschecked with the SIP assets under management (AUM) data, which is also disclosed by the same body. A mismatch between the two may be partially on account of bounced SIPs.
The SIP AUM rose from ₹2,75,983 crore in April to ₹2,76,218 crore in May, which is a rise of just ₹235 crore. However, monthly SIP flows disclosed by AMFI was several multiples higher at ₹8,123 crore in May. So where did ₹7,889 crore go?
One explanation could be the market drop, which has the effect of reducing AUM. Over this period (1 May to 31 May), Sensex fell about 1.2%. Another way to look at this is to examine overall equity mutual fund AUM, which is also affected by the stock market. This AUM fell by 1.4%. However, the missing ₹7,889 crore in the SIP data translates to 3% of the SIP AUM, double of what the market movement might explain. Thus it is unlikely that market movement fully explains the divergence between the reported SIP flows of ₹8,123 crore and the minuscule SIP AUM growth of ₹235 crore. It is difficult to explain just how much of the SIP flows might have actually bounced without precise data from AMFI. However, a crude estimation adjusting the missing SIP numbers against the market drop, suggests it may have been about half the SIP book or ₹4,000 crore.
Mint reached out to AMFI to get clarification on the divergence in numbers but no response was received till the time of this writing report.