SIPs becoming a core savings tool, domestic flows to drive Rs 52 lakh crore into Indian markets: Feroze Azeez – News Air Insight

Systematic Investment Plans (SIPs) are no longer being treated just as equity investment vehicles but are increasingly viewed by retail investors as a disciplined savings tool, said Feroze Azeez, Deputy CEO of Anand Rathi Wealth, in an interaction with ET Now.

According to Azeez, Indian investors—long known for their strong savings habits but weak investment practices—are now embracing SIPs as a stable way to participate in equities. “Ask a chauffeur whether he has checked his SIP value in the last six months—he will likely say no. That shows SIPs are becoming part of India’s saving DNA,” Azeez remarked.

Retail outperforms HNIs in discipline

Azeez highlighted that high net worth individuals (HNIs) often underperform retail investors due to poor market timing. In FY21, while the Nifty averaged 10,800, equity mutual funds other than SIPs saw outflows of ₹1.25 lakh crore, and portfolio management services (PMS) lost over ₹2 lakh crore. In contrast, SIP inflows were a positive ₹88,000 crore.“This data proves retail investors have been far more disciplined than HNIs,” he said, pointing out that SIPs insulated individuals from market volatility while fostering wealth creation.

Massive domestic inflows ahead

Since the pandemic, Indian household savings have significantly shifted towards financial assets. As per RBI data (March 2025), households hold ₹950 lakh crore in savings, with ₹70 lakh crore already in direct equities and mutual funds.“Post-Covid, domestic institutions have put ₹15 lakh crore into markets in just four years, compared to only ₹3 lakh crore in the previous eight. Our projections show at least ₹52 lakh crore of domestic flows entering Indian equities in the next eight years,” Azeez predicted.

Capital market stocks to play bigger role

Azeez expressed confidence in the Nifty Capital Markets Index, which currently includes 15 companies spanning asset managers, wealth managers, and financial infrastructure firms. He argued that as India targets becoming a $10 trillion economy, more capital market stocks will find representation in the main Nifty index.

“Capital market businesses have implied growth. If firms avoid mistakes and serve clients well, revenues automatically compound,” he said, adding that Anand Rathi’s average client portfolio has delivered 14.5% returns annually over the past 11 years.

Active vs passive debate in India

On the active-versus-passive investing debate, Azeez was critical of the way Indian indices are constructed, calling them “quirky.” He noted that around 130 companies with market capitalisation above ₹1,000 crore are excluded from NSE 500 due to index rules.

“Big AMCs may pitch passive investing as low-cost, but in India’s context, flawed index construction could mean destruction of value. Active managers, despite higher costs, still have a strong role to play,” he argued.

Market outlook

With GST and tax reforms boosting disposable incomes, domestic equity participation is set to rise further. Azeez expects both retail investors and institutions to increasingly channel savings into equities and capital market businesses, creating long-term compounding opportunities.“India’s journey towards a $10 trillion economy will require deeper financialisation of savings—and SIPs are already proving to be the foundation of that transformation,” he concluded.