HDFC AMC's Chirag Setalvad flags risk of moderation in equity SIP inflows

HDFC AMC's Chirag Setalvad flags risk of moderation in equity SIP inflows

Chirag Setalvad of HDFC AMC believes that equity inflows, particularly through systematic investment plans (SIPs), may face moderation over time. While monthly SIP inflows of Rs 25,000–30,000 crore have become the norm, he points out that this number was closer to Rs 5,000 crore just five years ago. Given the scale of this expansion, some degree of pullback should not be considered unusual.

Speaking at Dezerv Wealth Summit 2025, he highlighted that the accumulated SIP book is now substantial, and even a modest 10–15% redemption from this base could effectively offset several months of fresh inflows. In such a scenario, pressure could emerge from both sides — new SIP registrations slowing and existing investors redeeming. Importantly, flows do not need to collapse sharply to create discomfort; even a gradual decline from Rs 30,000 crore to Rs 25,000 crore, if sustained, could alter market sentiment meaningfully, he added.

Setalvad emphasised that markets are driven by probabilities, not certainties. While it is impossible to assign a precise likelihood to such an outcome, he believes the risk of a slowdown is material. The concern stems from the nature of recent inflows, which he feels have largely come from relatively younger investors with shorter investment horizons and limited experience of prolonged market drawdowns.

As a result, while a sharp reversal is not inevitable, Setalvad sees a reasonable probability that inflows could correct or even turn into outflows during periods of market stress. In his assessment, this risk is not negligible, even if its exact magnitude remains difficult to quantify.