Rolling returns on a monthly basis for Systematic Investment Plans (SIPs)

The rolling returns every month for Systematic Investment Plans (SIPs) across three major indices—Nifty 100 TRI (Large Cap), Nifty Midcap 150 TRI (Mid Cap), and Nifty Smallcap 250 TRI (Small Cap)—over various time horizons (3 to 15 years) from April 2005 to March 2025. This analysis evaluates the maximum, minimum, average, and median returns, along with the frequency of positive returns and returns exceeding certain thresholds (8%, 10%, and 12%), to provide insights into the risk-return profiles of these market segments.

 Returns Across Time Horizons

• Large Cap (Nifty 100 TRI): The average return ranges from 10.3% (3 years) to 12.3% (15 years), with a median return stabilizing around 13.0%-13.2% over longer periods. Maximum returns peak at 26.6% (3 years), while minimum returns dip to -36.8% (3 years), indicating higher short-term volatility.
• Mid Cap (Nifty Midcap 150 TRI): The average return increases from 13.9% (3 years) to 16.9% (15 years), with a median return ranging from 18.6% (3 years) to 17.2% (15 years). Maximum returns reach 37.5% (3 years), but minimum returns are significantly negative at -63.0% (3 years), reflecting higher volatility.
• Small Cap (Nifty Smallcap 250 TRI): The average return ranges from 11.9% (3 years) to 14.1% (15 years), with a median return peaking at 17.8% (5 years) and stabilizing around 14.4% (15 years). Maximum returns hit 42.1% (3 years), but minimum returns drop to -64.7% (3 years), indicating the highest short-term risk.

 Returns Exceeding Thresholds

• 8% Return: Large Cap achieves this 68%-98% of the time, Mid Cap 68%-100%, and Small Cap 66%-92%, with higher consistency over longer periods.
• 10% Return: Large Cap ranges from 57%-93%, Mid Cap from 66%-98%, and Small Cap from 61%-87%, with Small Cap showing a notable drop in shorter periods.
• 12% Return: Large Cap ranges from 44%-83%, Mid Cap from 64%-92%, and Small Cap from 59%-82%, with Mid and Small Caps outperforming Large Caps in frequency over longer horizons.

 Risk-Return Trade-Off

• Small Caps offer the highest maximum returns (42.1% over 3 years) but also the deepest losses (-64.7% over 3 years), suggesting the highest risk-reward potential.
• Mid Caps strike a balance with solid average returns (up to 16.9%) and moderate volatility compared to Small Caps.
• Large Caps provide the most stability, with lower maximum returns (26.6%) and less severe minimum losses (-36.8%), making them suitable for conservative investors.

Takeaways for SIP Investors:

• For stability: Large Caps offer a high probability of positive returns (91%-100%) and a median return of 10.9%-13.5%.
• For better growth: Mid Caps outperform large caps in long-term returns while maintaining relatively high positive return probabilities.
• For high risk-high reward: Small Caps show huge upside potential but come with significant short-term risks, requiring patience and a long-term approach.

Ultimately, a diversified approach, allocating investments across Large, Mid, and Small-cap funds based on risk tolerance and investment horizon, is the best strategy for maximizing returns while managing risk effectively.

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Declining Consumer Spending on the Global Economy- Mattern of Concern

Consumer spending is a critical driver of economic growth, particularly in the United States, where it accounts for nearly 70% of the Gross Domestic Product (GDP). However, recent economic data suggests that consumers are becoming increasingly cautious with their spending, prioritizing essentials over discretionary purchases. This shift has significant implications not only for the U.S. economy but also for global markets. As consumer demand weakens, economic growth slows, trade dynamics shift, and uncertainty rises, affecting businesses, policymakers, and investors worldwide.  By the end of 2024, U.S. household debt reached a record $18.13 trillion, up 3.6% from the previous year. While debt growth has slowed, and the household savings rate increased from 3.5% to 4.6% in January 2025, the savings rate remains low historically, suggesting a limited buffer for further spending declines.

The latest retail sales report highlights a significant slowdown in consumer spending, with February sales rising just 0.2%, well below the 0.7% expected. This slowdown is driven by consumer caution due to inflation concerns, market volatility, and policy uncertainty.

Retail weakness in discretionary categories suggests that consumers are prioritizing essential goods, indicating a shift in spending behaviour. This trend is concerning because consumer spending is a major driver of GDP growth, particularly in post-pandemic years, offsetting weaknesses in manufacturing and other sectors.

Broader Economic Impact in the U.S.

Consumers are cutting back on discretionary categories like apparel, footwear, and electronics, while increasing spending on necessities and select experiences like cruises and international flights. There’s also a trend toward trading down, with 75% of consumers opting for cheaper alternatives, particularly in groceries, as prices for essentials like meat and dairy rise. The Federal Reserve Bank of Atlanta’s GDP. The Empire State Manufacturing Index dropped sharply, further pointing to economic weakness. Consumer Sentiment Decline: Consumer confidence has declined for three consecutive months, dropping 11% in early March, reinforcing the trend of reduced spending.

 Global Economic Implications

The slowdown in U.S. consumer spending has ripple effects worldwide, as the U.S. remains a key driver of global demand. The OECD forecasts global GDP growth to moderate to 3.1% in 2025 and 3.0% in 2026, down from 3.2% in 2024. The U.S. economy is deeply connected to global markets, and when American consumers cut back on spending, the effects are felt worldwide. The Organization for Economic Co-operation and Development (OECD) has projected that global GDP growth will moderate to 3.1% in 2025 and 3.0% in 2026, down from 3.2% in 2024. The slowdown is expected to be most pronounced in economies closely tied to U.S. trade, such as Canada, Mexico, and Brazil.

One of the most pressing concerns is the impact of trade tariffs. The Trump administration’s proposed 25% tariff increase on imports from Canada and Mexico, set to take effect in April, could further disrupt supply chains, raise inflation, and reduce consumer purchasing power. Higher costs for imported goods may lead to lower demand, negatively impacting industries reliant on international trade.

Key concerns include:

• Trade Tensions & Tariffs: The 25% tariff increase expected in April between the U.S., Canada, and Mexico could reduce trade volumes and increase inflation in all three countries.
• Global Economic Uncertainty: Countries like Brazil, Canada, and Mexico are expected to experience economic slowdowns, contributing to the overall weakening of global growth.

Outlook and Risks

• Near-Term Growth Risks: Consumer spending weakness could lead to further economic deceleration, and businesses may hold back investment due to policy uncertainty.
• Trade Policy Uncertainty: If tariffs remain high, global supply chains will be disrupted, driving inflation up and growth down.
• Possible Soft Landing: A deep recession remains unlikely unless a major economic shock exists, but risks are clearly tilted to the downside.

Conclusion

The recent decline in consumer spending is a warning sign for the U.S. and global economies. As households become more cautious in purchasing decisions, economic growth slows, and businesses face increasing financial pressures. While a full recession remains unlikely without a significant external shock, the risks are clearly tilted to the downside. Policymakers must carefully navigate fiscal and trade policies to support economic stability and restore consumer confidence. A balanced approach that addresses inflation promotes job security and mitigates trade disruptions will be essential in sustaining long-term growth.

The decline in consumer spending signals economic weakness, which could weigh on U.S. and global growth. If tariffs increase and uncertainty persists, business investment and trade could slow further, amplifying economic risks. While household savings and a strong labour market provide some cushion, policymakers and investors must remain vigilant to avoid a sharper downturn.

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A shift is coming in Investing and towards the value of Money

The biggest difficulty of this current market is that a year ago you went to the client and asked for Rs 25 lakhs for investment showing performance and the client gave you Rs 50 lakhs instead. The last 6 months have given significant knowledge to the investors that rebalancing and realignment are two critical components of investing. In my interactions with MFDs, I have found that many of them failed to convince the clients about the fall of the market, keeping the current investments intact and at the same time guiding the clients to rebalance when the market was high in 2024 September.  

It was a surprised when we met many industry veterans and learned that there was no pressure on their faces from the client end related to the market correction, whereas, at the same time, there was another group of MFDs struggling to face clients.

The biggest question is what got wrong and where? Well, the last 4 years' rallies attracted investors to the market and new financial advisors who joined the market based on the rally of the equity market. Now managing clients when one is under a job in another firm and getting converted into MFD are two different aspects.

This has been one of the grey areas where the gap between clients and MFDs has widened. Further, the new MFDSs and those who had Rs 5cr to 10cr AUM in 2019-2020 sold only performance. It’s a bitter truth but when performance is being sold alone then redemption without notice to MFDs is bound to come.

The communication gap widened more due to this performance-based product sale. Past performance made the work easier to garner AUM. Now coming days and years will be different from the client's perspective and from the investment climate. As an investor, the responsibilities towards the investments and investing are now very high. Investors' basic awareness of investing is now an old subject.

Money in the bank isn’t safe. The moment you deposit your money in the bank, you don't truly own it. Your future self is getting poorer by 11% each year due to currency debasement. Houses are no longer a path to wealth. In the past, homes were affordable and provided financial security. Now, they’re “lifestyle banks” not wealth creators. Inflation control is just a gimmick since the climate chapter and syllabus are on no one's list.  Purchasing power will come down and vice versa savings and investing.  Opportunities where small investments can lead to massive returns. Yes, this is a theory that will prove more in the coming days.  On average, your purchasing power declines by 8% yearly. We are not getting this realization that we are becoming poorer

As you read any book on productivity asking for deep focus- similarly for investing and to remain invested you need deep focus. The voice of distraction will be more and hence as an investor you need to be educated and aware of such distractions.  As an investor you now have to pass exams and also MFDs need to come up with exams for getting the clients qualified to be a client of you. Yes, the coming times demand behavioural analysis of investors and repetitive analysis of the same and not a one-time affair.  The generation of 2000’s birth and post don’t know much about GFC and other stuff and hence education on the history is more important rather than performance-based product sales. Clients' deep focus towards financial objectives needs to be tested yearly to gauge the influence of distractions.  In short, a seismic shift is coming and money and investing will change forever.  Be ready now or get ready in time.

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Small Caps are now Historically Low in terms of Financial Leverage

In the small-cap & midcap fall of 28^th Feb 2025  the valuations, 200 days DMA and the financial leverage at the same time have come down making it more provoking for a long-term investment portfolio to be built from now.

The Nifty Smallcap 100 is down 24% and the Midcap 100 is down 21% since September 26, 2024, with 85% of BSE 200 stocks below their 200 DMA. The 200-day moving average (DMA) is a key technical indicator of long-term trends. When 85% of BSE 200 stocks (a broad index of 200 large and mid-cap companies) are below this level, it signals widespread bearish sentiment. The 200 DMA trend (85% below for BSE 200) suggests MSCI India’s 200 DMA (likely around 2,800-2,900 points based on prior levels) is a resistance level, with the index possibly trading below it (~2,600-2,700 by March 2025, assuming a 15-20% drop from 3,200). MSCI India’s P/E ratio fell from 25x in September 2024 to ~19x by February 2025, making it attractive long-term but still under pressure short-term.

With 50% of stocks down >20% and 85% below 200 DMA, MSCI India is now in the oversold zone. The fact that half of MSCI India stocks are down more than 20% since September 26, 2024, highlights a significant correction in large and mid-cap Indian equities, aligning with the broader market downturn (Nifty 50 -15.61%, Smallcap -24%, Midcap -21%). Two-thirds (~66%) of Nifty Small cap 100 (100 stocks) and Midcap 100 (100 stocks) being down 20% or more translates to ~66 stocks each.85% of BSE 200 stocks are currently below their 200 DMA; prior corrections have bottomed around 85%-90%

Now comes the leverage analysis part of small caps. The net debt ratio for small caps may have slightly risen (e.g., to 0.35-0.40) due to reduced cash reserves during the correction, but remains low compared to historical highs. Sectors like Metals and Energy might see modest increases as commodity prices stabilize, while IT and Consumer Discretionary retain low leverage. The low net debt ratio (0.29) suggests small caps are less vulnerable to debt defaults or liquidity crises than in prior corrections (e.g., 2008 or 2015, when ratios were 1.23 and 1.35). From March 2021 (0.50) to September 2024 (0.29), the overall small-cap leverage declined by 42%, driven by sectors like Utilities (-82%, from 1.10 to 0.54), Metals (stable at 0.24), and Real Estate (-39%, from 0.39 to 0.23).

The overall financial leverage across sectors has seen a significant decline from 1.35x in 2015 to 0.29x in Sep 2024. This suggests a reduction in debt levels, improved cash positions, or stronger earnings generation in small-cap companies.

  Sectors with Sharp Declines:

• Metals: Dropped from a peak of 4.32x in 2015 to just 0.24x in Sep 2024, showing a sharp deleveraging trend.
• Industrials: Declined from 1.25x (2003) to 0.11x (Sep 2024), reflecting better financial discipline.
• Consumer Discretionary: After a peak of 3.84x in 2012, it fell to 0.80x in Sep 2024, indicating reduced debt dependency.
• Utilities: This sector has historically had high leverage, but after peaking at 8.68x in 2018, it has come down significantly to 0.54x.

 Conclusion

The overall decline in leverage across small-cap sectors signals stronger financial health, reduced debt reliance, and improved cash management. The small-cap universe’s financial leverage has significantly declined to 0.29 by September 2024, the lowest in 21 years, reducing risk during the current correction. Companies have likely reduced debt in response to changing market conditions, economic cycles, and regulatory environments. The 200 DMA trend (85% below) reflects sentiment-driven selling, not leverage issues, suggesting the market may be oversold but requires catalysts for recovery. On the other hand half of MSCI India stocks are down more than 20% since September 26, 2024. While the market may be nearing a bottom (historically 85%-90% below 200 DMA), recovery depends on external and domestic catalysts. All the technical and financial aspects speak loudly its time now, but global factors will play its dice which makes the predictable unpredictable. 

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The Premature Redemption Schedule (April–September 2025)

The RBI’s circular, issued on February 21, 2025, outlines the premature redemption dates for multiple SGB tranches issued between October 2017 and September 2020, covering the period from April 1 to September 30, 2025. This allows investors who have held their bonds for at least five years to redeem them early, aligning with the SGB scheme’s established rules. 

Tranches:

• 2017-18 Series III: Issued October 16, 2017; redeemable April 16, 2025.
• 2019-20 Series V: Issued October 15, 2019; redeemable April 15, 2025.
• 2020-21 Series VI: Issued September 8, 2020; redeemable September 8, 2025.

• Submission Window: Investors must submit redemption requests within specified periods (typically 20–30 days before the coupon payment date), subject to change if unscheduled holidays occur.
• Redemption Price: Based on the average closing price of 999-purity gold for the prior week, as published by the India Bullion and Jewellers Association (IBJA).

• The option to redeem SGBs after five years (on coupon payment dates) has been a core feature since the scheme’s launch in November 2015, as per the Consolidated Procedural Guidelines. The RBI has consistently published such schedules semi-annually (e.g., October 2024–March 2025 covered 30 tranches from May 2017–May 2020). The April–September 2025 schedule is simply the next iteration, covering bonds issued five years prior (2017–2020).
• There’s no official statement indicating the government or RBI is actively pushing investors out. The premature redemption process remains voluntary—investors can hold until the eight-year maturity for full benefits (e.g., tax-exempt capital gains on redemption), or exit early based on personal financial goals or market conditions (e.g., gold at ₹76,000–₹78,000/10g now, potentially ₹110,000–₹115,000 by FY26, per prior forecast).
• The lack of new issuances might reflect fiscal prudence (gold’s rally to $2,954/oz increases payout costs) or a shift in priorities (e.g., reducing gold import reliance), but it doesn’t alter the existing bonds’ terms. The April–September 2025 schedule is a procedural update, not a policy pivot.

Why the Perception Persists

• Recent Trends: Gold’s 10–12% YTD gain in 2025 (per prior gold ETF data) and the scheme’s halt could suggest the government sees it as less cost-effective, especially as borrowing costs rise (e.g., FY24 gross borrowing via SGBs was ₹26,852 crore). Investors might fear a “soft exit” strategy.
• Market Sentiment: Equity corrections (Nifty 50 -13.2%, Smallcap 100 -21.6% from peaks, per prior response) contrast with gold’s strength, possibly prompting speculation that the RBI is signaling a shift away from gold-linked instruments.
• Misinterpretation: The high-profile nature of the announcement, amid no new issuances, might be misread as a push, though it’s just a routine notice for eligible tranches.

Conclusion

The RBI’s April–September 2025 SGB premature redemption schedule is BAU, not a government ploy to push exits. It’s a standard option—available since 2015—for bonds hitting five years, covering 2017–2020 tranches as expected. The scheme’s pause and high gold prices might fuel speculation, but this announcement reflects procedural continuity, not a strategic shift. For investors, it’s a chance to reassess holdings (e.g., exit at ~₹76,000/10g or hold for a potential ₹115,000 by FY26), not a forced move. 

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Corporate Profit to GDP - All set again.

The role of corporate earnings in GDP is a critical barometer for measuring the future growth prospects of an economy which drives investments from the FII. India’s corporate earnings as a percentage of GDP have seen a significant rise over the past six years, reflecting a structural shift in the economy. From 6.9% of GDP in FY18 to 12.2% in FY24, corporate profitability has witnessed a robust increase of 538 basis points (bps). This surge has been primarily driven by key macroeconomic factors such as rising net investments, a decline in the current account deficit (CAD), and increasing dividend payouts.

1. Rise in Net Investments (35% Contribution)

The single biggest factor driving corporate earnings growth has been the increase in net investments as a share of GDP, which grew from 25.4% in FY18 to 27.3% in FY24. This 191 bps increase contributed 35% of the total earnings expansion. Higher investments in infrastructure, manufacturing, and technology have propelled corporate profitability, reflecting strong capital formation and business expansion.

2. Decline in Current Account Deficit (22% Contribution)

India’s current account deficit (CAD) as a percentage of GDP improved significantly, reducing from -1.8% in FY18 to -0.6% in FY24. This 119 bps shift accounted for 22% of the total rise in corporate earnings. A lower CAD implies a stronger external balance, reducing financial vulnerabilities and improving profitability for export-oriented firms.

3. Increase in Dividend Payouts (22% Contribution)

Corporate dividends as a percentage of GDP more than doubled, rising from 1.4% in FY18 to 2.6% in FY24—a 120 bps jump. This trend, contributing 22% of the earnings growth, reflects increasing shareholder rewards and a shift towards a more sustainable return-on-equity model.

4. Household Savings and Government Savings Impact

Household savings as a share of GDP saw a slight improvement, rising 87 bps from -19.3% in FY18 to -18.4% in FY24, contributing 16% to corporate earnings growth. Meanwhile, government savings increased modestly by 20 bps to 1.4% of GDP, adding 4% to the overall change.

 

 Corporate Profit-to-GDP Ratio: Historical Data and Trends:

• FY24’s 4.8–5.2% ratio (Nifty 500 and listed universe) marks a reversal, driven by improved net profit margins despite tepid revenue growth.

·        Earlier peaks include 3.2% in FY11 and a 10-year high of 2.63% in FY21, boosted by cost cuts and commodity gains during the pandemic.

FY21 (2020–21): 2.63–2.69% (10-year high, ), with Nifty 500 at ~4.1% Profits surged 57.6% YoY to ₹5.31 trillion amid cost cuts and commodity price drops, outpacing GDP contraction (-4.2% nominal).

FY22 (2021–22): 4.3–4.5% , with Nifty 500 at 4.5%. Profits grew 48% YoY, nominal GDP at 19.5%, led by BFSI, oil & gas, and metals.

FY23 (2022–23): 4.1–4.3% (Nifty 500 at 4.1%, listed universe 4.3%, ). Profits grew 8.7% YoY (slower than FY22’s 49%), lagging nominal GDP’s 16.1%, dragged by commodity price volatility.

FY24 (2023–24): 4.8–5.2% (15-year high). Nifty 500 at 4.8%, total listed at 5.2%, with 30% YoY profit growth (₹14.11 lakh crore) outpacing nominal GDP’s 9.6%, led by BFSI, oil & gas, and autos.

Now which sectors have contributed and will be contributing is an insight to delve from the above numbers.

Last 15 Years (FY10–FY24, 2009–10 to 2023–24)

a)      Overall Ratio Trend: From ~3.2% in FY10 to a low of 2.1% in FY20, then up to 4.8–5.2% in FY24

Last 10 Years (FY15–FY24, 2014–15 to 2023–24)-

a)      Overall Ratio Trend: From 4.1% (FY15) to 2.1% (FY20), then 4.8–5.2% (FY24).

Last 4 Years (FY21–FY24, 2020–21 to 2023–24)

a)      Overall Ratio Trend: From 2.63–4.1% (FY21) to 4.8–5.2% (FY24).

A synopsis of Historical Corporate Profit to GDP- Sector contributors

·        15 Years: BFSI (30–40%) and energy (15–25%) dominated, with industrials and IT fading post-FY15, contributing ~60–70% of profits.

·        10 Years: BFSI (35%) and energy (20%) led ~55%, with autos and industrials rising post-FY20.

·        4 Years: BFSI (40%), energy (25%), and autos (~10%) fueled ~75%, reflecting a concentrated recovery.

     MSME Role in  Corporate Profit to GDP Ratio

• 15 Years: MSMEs’ profit-to-GDP contribution fell from ~0.5% (FY10) to ~0.2% (FY20), then rose to ~0.7–1% (FY24), averaging ~10–15% of profits.
• 10 Years: From ~0.3–0.4% (FY15) to ~0.7–1% (FY24), with a low of ~0.2% (FY20), contributing ~10–20%.
• 4 Years: Grew from ~0.3–0.6% (FY21) to ~0.7–1% (FY24), ~15–20% of profits, peaking in FY24.
• Early Period (FY10–FY15): MSMEs likely contributed 10–15% to total corporate profits (₹4–5 lakh crore annually), with a profit-to-GDP impact of ~0.3–0.5%. BFSI and energy dominated (50–60%, per prior response), leaving smaller sectors like MSMEs (often unlisted) with a modest share.
• FY15–FY20: Declined to ~8–12% as ratio fell to 2.1% (FY20). MSME profits stagnated amid credit constraints (e.g., post-IL&FS crisis) and demand slowdown.
• FY21–FY24: Rebounded to 15–20% of profits (₹2–2.8 lakh crore in FY24), driven by post-COVID recovery, government schemes (e.g., ECLGS), and small-cap rallies (Nifty Smallcap 100 up 93% over FY23–24).

 

      Conclusion:

The surge in corporate earnings as a percentage of GDP reflects India’s evolving economic landscape. A mix of higher investments reduced CAD, and rising dividends has contributed significantly to corporate profitability. Going forward, continued policy support, robust capital expenditure, and a favourable macroeconomic environment could sustain this growth momentum, further strengthening India’s corporate earnings trajectory. FY-26 you will find consumption, banking, and IT to play a major role followed by Infrastructure since around Rs 16lakh cr ( approx) will be getting deployed.  Job creation and liquidity will play a big role in the MSME segment.MSMEs play a growing but secondary role in corporate profits compared to BFSI and energy, with their ~30% GDP share amplifying their economic impact beyond listed metrics. FY25’s slowdown suggests a dip, but the long-term potential remains with policy support.

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How Much Gold Is Golden?

Most projections cluster between $2,800 and $3,300 per troy ounce by year-end 2025, with some outliers suggesting higher peaks. The price in India will cross Rs.95000 in FY-26. The $3,000 mark could hit as early as Q1 if momentum holds.

Since late 2024, speculation about U.S. import tariffs under President Donald Trump has boosted gold prices in New York (e.g., futures at $2,935-$2,909 per ounce, an 11% rise in 2025 per reports). This created an arbitrage opportunity, with gold in London lagging $20/ounce behind, prompting banks like JPMorgan and HSBC to ship gold from London to NYC.

Around 8,000 bars (2% of BoE’s stock) or 12.2 million ounces have been moved since late 2024, raising COMEX stocks to 29.8 million ounces—a 75% increase since November 2024. The Reserve Bank of India also repatriated 202 tonnes to India in 2024. Emerging markets (China, India, Turkey, Poland) are diversifying reserves away from the U.S. dollar amid de-dollarization efforts, sanctions risks (post-Russia-Ukraine), and trade tensions (e.g., Trump’s tariff threats).

The World Gold Council (WGC) reports that central banks added 712 tonnes in the first three quarters of 2024, followed by 333 tonnes in Q4. This reflects sustained demand, though Q2 and Q3 saw slowdowns (183 tonnes and 186 tonnes, respectively) compared to the record-breaking Q1 (290 tonnes). The buyers are especially from emerging markets (e.g., Poland, China, India). The WGC expects central banks to “remain in the driving seat” in 2025, implying no sudden pivot to net selling last week.

The latest monthly data shows a net addition of 53 tonnes, with buying outpacing selling, driven largely by emerging market banks like Poland (21 tonnes) and China (5 tonnes, its first since April).

Central banks like China (2,235 tonnes), India (876 tonnes), Turkey (585 tonnes), and Poland (420 tonnes) are stockpiling gold to hedge inflation, diversify from the U.S. dollar, and bolster stability amid geopolitical tensions (e.g., sanctions, de-dollarization efforts by BRICS+). Gold could face headwinds if the Fed pauses cuts or reverses to fight rebounding inflation (e.g.,the  U.S. CPI hit 2.7% in November 2024). A stronger dollar from steady rates might also cap gains, though the recent dollar-gold correlation has weakened.

The ETF Landscape

The global AUM for physically backed gold ETFs reached US$294 billion by the end of January 2025. This figure reflects the combined value of gold these funds hold, supported by inflows and a rising gold price. In terms of physical gold, global gold ETFs held 3,253 tonnes as of the end of January 2025, up by 34 tonnes from December 2024 due to January’s inflows. This tonnage represents the actual amount of gold backing these funds worldwide.   The top gold ETF buyers recently are likely European institutional and retail investors (leading with $3.4 billion in January).

 January’s surge with US$3.4 billion in inflows, was driven by safe-haven demand in the UK, Germany, and France amid falling bond yields and political uncertainty. North America saw outflows (US$499 million in January), while Asia, particularly China, contributed to inflows (e.g., US$552 million or 8 tonnes in mid-February). followed by Asian investors (China: $552 million in a week, India: $400 million in January), with North American institutions (e.g., JPMorgan via GLD) and other regions (Australia, South Africa) as secondary players.

 The $3.4 billion inflow suggests European investors are the top buyers in 2025 so far, reversing 2024’s trend. This could wane if bond yields rise sharply. China and India’s retail-driven buying is robust but price-sensitive—high prices ($2,900+) might slow inflows unless geopolitical risks escalate.

Conclusion

For most Indian investors, 10–15% in gold strikes an optimal balance—hedging inflation, rupee risks, and market downturns while leaving room for growth assets. Conservative investors can lean toward 15–20%, and aggressive ones 5–10%, split between ETFs, SGBs, and minimal physical gold. This aligns with India’s unique blend of financial and cultural priorities.

Based on the risk profile of an investor the following recommendation can be suggested

·   Young Professional (25–35, High Income): 5–10% (e.g., ₹5–10 lakh in a ₹1 crore portfolio), via ETFs/SGBs, balancing equity growth (70%) and debt (20%).

·    Middle-Aged Family (35–50, Moderate Risk): 10–15% (e.g., ₹15–22.5 lakh in a ₹1.5 crore portfolio), mixing ETFs (5–7%) and physical gold (5–8%), with 60% equity, 25% debt.

·   Retired (60+, Low Risk): 15–20% (e.g., ₹30–40 lakh in a ₹2 crore portfolio), favouring SGBs (10%) and physical gold (5–10%), with 50% debt, 30% equity.

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The RBI’s USD/INR Buy/Sell Swap Auction of $10 billion for three years - Impact Analysis

The RBI’s USD/INR Buy/Sell Swap Auction of $10 billion for three years will significantly affect the Indian stock market.  The spot on that swap will inject INR liquidity by exchanging USD with banks. This is essentially a form of monetary easing without directly cutting policy rates, giving the RBI flexibility to manage liquidity. Banks selling USD to RBI for INR will increase rupee liquidity, potentially lowering interest rates and spurring credit growth—bullish for banking and NBFC stocks (e.g., HDFC Bank, Bajaj Finance). Lower interbank rates (e.g., MIBOR) could also encourage banks to lend more aggressively, potentially increasing credit availability for small and medium enterprises (SMEs), which are critical to India’s economy.

1. Positive Impact on Banking & Financial Stocks

• Banking stocks, particularly PSU banks (e.g., State Bank of India, Bank of Baroda), could see a short-term rally due to improved net interest margins (NIMs) as funding costs decline.
• NBFCs like Bajaj Finance or HDFC Life might also benefit from cheaper borrowing, especially those financing consumer durables or housing, where demand could pick up.
• Watch for stock-specific reactions based on their exposure to liquidity-sensitive segments.

2. Boost to Interest Rate-Sensitive Sectors

• Real estate firms (e.g., DLF, Godrej Properties) and auto companies (e.g., Maruti Suzuki, Tata Motors) could see a demand uptick as EMI burdens ease for consumers.
• Capital goods companies like Larsen & Toubro might benefit from increased infrastructure spending if cheaper credit spurs government or private projects.
• However, the magnitude of this boost depends on how much of the liquidity trickles down to end consumers versus staying within the financial system.

3. INR Stability and FPI Flows

• By absorbing USD supply, the RBI aims to smooth INR volatility, which is critical amid global uncertainties (e.g., U.S. Fed rate hikes, and geopolitical tensions). A stable INR could indeed make Indian equities more attractive to FPIs compared to other emerging markets.
• IT firms (e.g., TCS, Infosys) and exporters might face a mixed bag—muted INR appreciation helps their margins, but a stronger rupee could still cap gains compared to a weaker currency scenario.
• FPI inflows could target large-cap indices like the Nifty 50 or Sensex, amplifying gains in blue-chip stocks.

4. Positive Market Sentiment

• The RBI’s proactive stance signals confidence in managing external pressures (e.g., USD strength, oil price volatility), which could reduce risk premiums in equity valuations.
• Higher trading volumes might particularly benefit brokerage firms (e.g., Zerodha, and Angel One indirectly via market activity).

Overall Market Impact

Banking, NBFCs, and rate-sensitive sectors should see a bullish run. The Nifty Bank Index and Nifty Financial Services could outperform broader indices like the Nifty 50.On the other hand, the trajectory hinges on macroeconomic factors. If inflation stays in check and global conditions remain favourable (e.g., no sharp USD rally), the positive momentum could be sustained. However, external shocks or policy tightening could cap gains.

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What does P/BV, (EBITA/EBITDA) & PAT speaks about Midcap?

 

Indian midcap sectors that might perform well shortly (as of February 20, 2025), and considering the historical performance midcaps with a 10-year CAGR of 18.8% outperforming large caps (13.2%) and small caps (15.7%), albeit with higher risk (25% standard deviation and 49% max drawdown). The Nifty Midcap 100 is trading at a forward P/E of ~33x, a 58% premium over the Nifty 50’s 20.8x, and the BSE Midcap 150 is at ~26x, down from a 5-year median of 30.6x. Despite the correction, valuations remain elevated, reflecting a partial unwind of the 2023-2024 rally’s exuberance.

 Price-to-Earnings (P/E) Ratio

The Nifty Midcap 150’s forward P/E ratio is approximately 35.1 as of February 19, 2025, per data from sources.

• This is down from higher levels in 2024 (e.g., above 40x during the peak), following an 18% correction from the September 2024 high. The Nifty Midcap 150 trades at a significant premium to the Nifty 50 (20.8x), roughly 68%-88% higher, depending on the exact P/E used (35.1x vs. 39x).
•  The P/E has moderated from its 5-year median (closer to 31x-33x), but remains elevated, signalling that while the correction has reduced froth, midcaps are not yet at historical bargain levels.

 

Earnings Before Interest, Taxes, and Amortization (EBITA/EBITDA)

• Exact EBITDA for the Nifty Midcap 150 isn’t readily available as a real-time aggregate. However, EBITDA can be inferred from PAT and operating margin trends. With midcap operating margins up 35-40 basis points year-on-year in FY25 (per earlier analyses), and assuming a PAT-to-EBITDA ratio typical for midcaps (e.g., 40%-50% of EBITDA converts to PAT after interest, taxes, etc.), EBITDA could range from ₹4.5 lakh crore to ₹5.5 lakh crore annually as of early 2025.
• This aligns with the index’s market cap of ₹82.5 lakh crore (June 2024), implying an EBITDA-to-market-cap yield of ~5.5%-6.5%. Posts on X and reports suggest midcap EBITDA growth mirrors PAT (e.g., 138% EPS rise FY20-FY24), though FY25 growth is slower.

 

Profit After Tax (PAT)

•  For the Nifty Midcap 150, PAT isn’t reported as a single figure daily, but aggregate data provides insight. From June 2019 to June 2024, the index’s PAT doubled (207% growth) to ₹2.05 lakh. Assuming a 7%-8% growth rate in FY25 (consistent with midcap earnings trends), PAT could be around ₹2.18 lakh crore to ₹2.22 lakh crore as of early 2025.
• This growth outpaces the Nifty 50, with midcap PAT rising 138% from FY20 (₹15 EPS) to FY24 (₹489 EPS). However, FY25 growth has slowed (7-8% vs. historical double-digit rates), reflecting macro headwinds like FII outflows and muted demand.

Valuations analysis over the years

• Last 2 Years: P/E spiked to 40x in 2024, then fell to 35.1x-39x in 2025, with P/B peaking at 6x and PAT/EBITDA showing slower growth (7-8%), reflecting a correction phase.
• 5 Years: P/E rose from 20x to 35x+, P/B from 3.5x to 5x, and PAT/EBITDA doubled, driven by a 22.3% CAGR and 138% EPS growth (FY20-FY24).
• 10 Years: P/E climbed from 18x to 35x+, P/B from 3x to 5x, and PAT/EBITDA quadrupled, with a 15.4% CAGR, showcasing midcaps’ long-term outperformance.

 Conclusion

For a long-term portfolio (5+ years), now is a decent time to start building exposure to Indian midcaps, particularly in the sectors above, but not an all-in moment. The recent decline tempers the risk of buying at peak valuations, and midcaps’ historical edge (18.8% CAGR) supports gradual entry.

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Comparison of U.S and Indian Midcap Valuations

As of February 20, 2025, U.S. midcap stocks have demonstrated resilience amid market volatility. The S&P MidCap 400 Index has outperformed the S&P 500 year-to-date, reflecting investor confidence in mid-sized companies. Valuation metrics indicate that the S&P MidCap 400 trades at a forward price-to-earnings (P/E) ratio of approximately 16x to 18x, aligning with historical trends. However, within growth-oriented segments, particularly in the Russell Midcap Growth Index, over 40% of constituents are trading above 40 times earnings, significantly higher than the historical range of 10%-20%.

In contrast, Indian midcap stocks have experienced a correction. The Nifty Midcap 100 Index has declined by approximately 13% since its peak in late September 2024, underperforming both Asian and global emerging market counterparts. Despite this downturn, valuations remain elevated, with the Nifty Midcap 100's forward P/E ratio at approximately 33x, representing a premium of about 58% over the Nifty 50's 20.8x. This premium persists even after significant foreign institutional investor outflows, exceeding ₹85,000 crore in 2025, and a slowdown in corporate earnings growth, which stood at 5% in the October-December quarter. Analysts anticipate continued market weakness at least until the end of March, with some predicting prolonged pressure due to weak earnings and high valuations.

Indian midcaps’ high valuations stem from a multi-year rally in 2023-2024, where they doubled the returns of large caps, fueled by domestic investor enthusiasm and growth optimism. However, the correction in 2025 suggests a partial unwind of this exuberance, though they remain pricey relative to fundamentals, with some analysts arguing a further 15-20% adjustment could align them with historical averages.

Current Valuation Metrics of Indian Midcaps

• Nifty Midcap 100: The forward price-to-earnings (P/E) ratio stands at approximately 33x, compared to the Nifty 50’s 20.8x, reflecting a 58% premium over large caps. This is down from its peak in 2024 but still elevated compared to historical averages.
• BSE Midcap 150: Trades at around 26x P/E, below its 5-year median of 30.6x, indicating a partial correction. It remains 45% above the Nifty 50, suggesting a persistent premium.
• Historical Context: Over the past decade, Indian midcaps have traded at premiums ranging from 20%-50% over large caps, with current levels near the higher end despite a year-to-date correction of 7%-14% (Nifty Midcap 100) and an 18% drop from its September 2024 peak.

 

• U.S. Midcaps: Forward P/E of 16x-18x (S&P MidCap 400) to 40x+ (Russell Midcap Growth extremes). This range reflects a mature market with pockets of overvaluation in growth stocks.

 

1. Growth Context:
• U.S.: Midcaps benefit from a stable economy, with GDP growth projected at 2%-3% for 2025. Earnings growth is moderate but consistent, supporting valuations in less speculative segments.
• India: Midcaps operate in a higher-growth economy (6.3%-7% GDP growth expected), but recent earnings slowdowns and macro pressures have dented confidence. The premium reflects past outperformance rather than current fundamentals.
• Takeaway: U.S. midcaps appear more reasonably priced for their growth, while Indian midcaps’ valuations seem stretched despite higher economic growth potential.

Is This the Right Time to Build a Long-Term Portfolio?

1. Correction Creates Entry Points:
• The 18% decline from the September 2024 peak and year-to-date losses suggest some overvaluation has been priced out.  Market reports note that midcaps are forming higher bottoms (e.g., February 19’s 1.39% bounce), hinting at a potential trend reversal or stabilisation.
• For long-term investors (5-10 years), current levels could offer a base to capture future growth, especially if India’s GDP growth sustains at 6.3%-7%.
2. Long-Term Growth Potential:
• Indian midcaps have historically outperformed large caps over extended periods (e.g., 2x returns over a decade), driven by India’s structural growth story—rising middle-class consumption, infrastructure spending, and digitalization.

3. Selective Opportunities:

• The correction has separated winners from losers. Companies with strong balance sheets, sustainable cash flows, and reasonable valuations (closer to 20x-25x P/E) are emerging as attractive picks for a long-term portfolio.

 

Conclusion

Focus on Quality: Target midcaps with:

• P/E ratios are closer to 20x-25x (below the index average).
• Strong fundamentals (e.g., revenue growth >10%, debt-to-equity <1, positive cash flow).
• Exposure to resilient sectors (e.g., IT, healthcare, consumer durables).

Indian midcaps in February 2025 aren’t at rock-bottom valuations, but the correction has made them more palatable for long-term investors than they were in 2024. While risks potentially push valuations lower—this isn’t a bad starting point if you’re selective and patient. The “right time” for a long-term portfolio is less about precision timing and more about disciplined entry and holding quality stocks through cycles. 

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Market Trends and the Impact of Market Cap Decline Stock wise in 2025

The financial markets are highly dynamic, and the fluctuations in stock prices often lead to significant shifts in market capitalization. As of February 17, 2025, the Indian stock market has witnessed a considerable correction, with benchmark indices falling by around 12% since late September 2024, while broader indices have declined by 21%. One of the most striking effects of this downturn is the reduction in the number of companies valued at over ₹1 lakh crore, which has dropped from 106 on September 26, 2024, to just 82—a staggering 26 companies losing their elite status.

The Impact on Market Leaders

Despite the overall downturn, Reliance Industries remains the most valuable company in India, though its market cap has dropped by 18.4% from ₹20.3 lakh crore to ₹16.57 lakh crore. Similarly, Tata Consultancy Services (TCS), ranked second, experienced a 9% decline, bringing its market cap down to ₹14.1 lakh crore. HDFC Bank, the third-ranked entity, saw a relatively modest 3.4% drop, reducing its market capitalization to ₹13.1 lakh crore. These declines indicate a broader market correction that has affected even the largest and most stable companies.

Companies with the Biggest Declines

Among the 26 companies that exited the ₹1-lakh-crore club, some faced particularly steep declines. JSW Energy suffered the most, with a massive 44.4% reduction in its market cap, which dropped from ₹1,35,714 crore to ₹75,442 crore. Similarly, Samvardhana Motherson saw a 41.3% fall, reducing its market cap from ₹1,49,732 crore to ₹87,916 crore. Other notable declines include Suzlon Energy (-36.6%), Hero MotoCorp (-35.9%), and Rail Vikas Nigam (-34.3%).

Sectoral Impact and Key Trends

Financial, energy, and infrastructure companies were among the hardest hit during this market correction. Colgate-Palmolive India, a leading consumer goods company, also faced a decline of 33.4%, reflecting broader challenges in the FMCG sector. Infrastructure-focused firms such as Adani Energy Solutions (-32.3%) and Rail Vikas Nigam (-34.3%) saw their valuations diminish significantly. The financial sector was not spared either, with Bajaj Housing Finance (-30.6%) and IndusInd Bank (-27.8%) witnessing steep losses.

Causes of the Market Correction

Several factors contributed to this substantial decline in market capitalization. Global economic uncertainties, rising interest rates, and concerns over inflation have led to increased investor caution. Domestic factors such as regulatory changes and earnings slowdowns have further dampened market sentiment. The correction has impacted midcap and smallcap stocks more severely, causing broader indices to decline at a sharper rate than benchmark indices.

Conclusion

The market correction witnessed in early 2025 highlights the volatility and unpredictability of financial markets. While large-cap companies such as Reliance, TCS, and HDFC Bank remain resilient, the sharp decline in midcap and smallcap stocks underscores the challenges faced by investors. The exit of 26 companies from the ₹1-lakh-crore club signifies a broader reevaluation of stock valuations. Going forward, market participants will need to navigate these uncertainties with caution, keeping an eye on economic indicators and corporate earnings to make informed investment decisions.

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U.S. slowdown to intensify in coming 6 months of 2025 - Series 1

The United States is facing a deepening financial crisis as households buckle under soaring debt and worsening delinquency rates. Credit card balances surged to a record $1.2 trillion in 2024, with defaults skyrocketing to levels unseen since the aftermath of the 2008 Financial Crisis. Simultaneously, auto loan delinquencies have surged to their highest point in 14 years, surpassing even pandemic-era peaks, as millions of Americans struggle to keep up with payments.

Younger generations and subprime borrowers are bearing the brunt of this turmoil, with delinquency rates hitting alarming highs amid rising living costs, tighter credit conditions, and stagnating wage growth. These trends, coupled with a sharp decline in retail sales and historic levels of small business uncertainty, signal a precarious economic landscape where consumer resilience is eroding—raising urgent questions about the sustainability of recovery efforts and the risk of broader financial contagion.

American households are grappling with unprecedented debt levels. Total household debt surged by 93 billion in Q4 2024, hitting an all−time high of 93 billion in Q42024, hitting an all-time high of 18 trillion. Credit card debt drove much of this increase, soaring by 45 billion in the quarter to a record 45 billion in the quarter to a record 1.2 trillion—a $430 billion cumulative rise over three years. Household debt now equals 87% of disposable income, amplifying financial fragility.

Credit Card and Auto Loan Distress

• Delinquencies Surge: Serious credit card delinquencies (90+ days overdue) rose to ~7% in Q4 2024, the highest since the 2008 Financial Crisis. Younger generations are disproportionately affected, with delinquency rates of 9–11%.
• Subprime Borrowers Hit Hard: For this group, serious delinquencies reached 22% in Q3 2024—a 12-year high. Subprime borrowers account for 23% of the consumer credit market.
• Defaults Spike: Credit card defaults surged 50% year-over-year in the first nine months of 2024, totalling $46 billion—the highest since 2010.
• Auto Loans Strain: Serious auto loan delinquencies climbed to 3.0% in Q4 2024, the worst level in 14 years, surpassing peaks seen during the 2001 recession and 2020 pandemic.

Retail Sales and Credit Access Worsen

U.S. retail sales unexpectedly fell 0.9% month-over-month in January 2024, far below the estimated 0.2% decline. Sales in the “control group” (a core GDP component) dropped 0.8%, contrasting with forecasts of a 0.3% gain. Concurrently, credit rejection rates spiked to 23%—a decade high—with nearly half of applicants denied credit limit increases, exacerbating financial pressures on households.

Small Business Uncertainty Skyrockets

The NFIB Uncertainty Index for small businesses recorded its largest monthly jump in history, rising to 100 in January 2024—the third-highest level on record. Escalating trade tensions and economic volatility have left firms hesitant to invest, further clouding growth prospects.

Conclusion

America’s debt-driven consumer strain and weakening retail activity, paint a troubling picture for the global economy. Rising delinquencies, tighter credit access, and heightened business uncertainty suggest mounting headwinds that could deepen slowdowns in 2024 and beyond. 

The combination of tariffs and immigration policies could introduce uncertainty, reduce consumer spending, and slow business investment The uncertainty surrounding these policies has led to market volatility, with investors adopting a more cautious approach, potentially reducing economic activity. 

The interplay of these policies with the existing economic environment suggests a complex scenario where growth might be tempered by inflation and policy uncertainty, potentially leading to a slowdown. The increase in delinquency rates is a sign of stress in consumer finances, which could further contribute to or be exacerbated by an economic downturn.

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Which SIP faces the highest redemption, and where are clients moving out?

This data analysis speaks very loudly what Financial Advisors are important and plays a pivotal role in the Indian Financial system. Clients might ignore and now that ignorance is leading to misguidance.  Mr. Naren might have been successful in instigating these clients who were under DIY which also has impacted for short term to the clients who have financial advisors. The data provides a clear insight into investment behaviour patterns and the importance of financial discipline. Investors looking for long-term wealth creation may benefit from the structured approach of regular plans, where professional advice ensures a steady investment strategy. Systematic Investment Plans (SIPs) have become a preferred mode of investing in mutual funds, offering a disciplined and long-term approach to wealth creation. An analysis of the Assets Under Management (AUM) from SIPs in the mutual fund industry reveals interesting insights into the longevity of investments across direct and regular plans. Systematic Investment Plans (SIPs) have been a cornerstone of wealth creation in the mutual fund industry. As of December 2024, the total SIP AUM stood at Rs. 13.63 lakh crore, with distinct differences in investor behaviour between direct and regular plans.

A closer look at SIP longevity reveals that regular plans have a higher number of long-term investors, whereas direct plans see a larger proportion of short-term investments. Additionally, regular plans show significant growth in the number of SIPs across all durations compared to direct plans.

 

SIP AUM Distribution: Key Trends

As of December 2024, the total SIP AUM in the mutual fund industry stood at Rs. 13.63 lakh crore. Among these investments, a significant portion has been held for more than five years, highlighting the commitment of investors towards long-term wealth accumulation.

• Long-Term Investment (Over 5 Years): Rs. 4 lakh crore, accounting for 29% of total SIP AUM.
• Short-Term Investment (Less than 1 Year): Rs. 2.95 lakh crore, making up 22% of total SIP AUM.

This data suggests that while a large portion of investors prefer staying invested for the long term, a considerable amount of SIP investments are relatively new, indicating ongoing participation and fresh inflows.

Direct Plan SIP AUM: Higher Short-Term Investments

When analyzing SIP investments through direct plans, a different trend emerges. A substantial portion of direct plan SIP AUM has a shorter investment duration.

• SIP AUM with less than 1-year duration: Rs. 85,200 crore (30% of total direct plan SIP AUM).
• SIP AUM with more than 5-year duration: 19% of the total direct plan SIP AUM.

This suggests that direct investors—often more informed and financially savvy—might be experimenting with SIPs in the short term or adjusting their portfolios frequently.

Regular Plan SIP AUM: Higher Long-Term Retention

In contrast to direct plans, regular plan SIPs show a higher tendency for long-term investments, reflecting the role of financial advisors and distributors in guiding investors.

• SIP AUM with over 5-year duration: 32% of total regular plan SIP AUM.
• SIP AUM with less than 1-year duration: 19% of total regular plan SIP AUM.

The higher longevity in regular plans indicates that investors who rely on advisors tend to stay committed to their SIPs for longer durations, potentially benefiting from the power of compounding.

 

Regular Plans Have Higher Longevity

• 32% of total SIP AUM in regular plans has been invested for more than five years, compared to only 19% in direct plans.
• Investors in regular plans tend to remain invested for longer durations, likely due to financial advisors’ guidance.

2. Direct Plans Have Higher Short-Term Investment

• 30% of direct plan SIP AUM (Rs. 85,227 crore) has been active for less than a year, indicating that many investors use direct plans for short-term investments.
• In contrast, only 19% of regular plan SIP AUM (Rs. 2,09,799 crore) falls under the less-than-one-year category, showcasing better investor retention.

Overall Growth in SIPs is Higher in Regular Plans

• The total number of SIPs in regular plans is 57% higher than in direct plans.
• Regular plans have more participation across all durations, highlighting the role of advisory services in guiding investors.

4. Mid-Term Investment (2 to 5 Years) Growth is Strong in Regular Plans

• SIPs with 2 to 3 years duration grew by 90% in regular plans compared to direct plans.
• SIPs in the 1 to 2 years category doubled (100% growth) in regular plans versus direct plans.

This indicates that more investors in regular plans are sticking around for mid-term durations, possibly transitioning toward longer-term investment habits.

Conclusion

The most crucial takeaway from this analysis is that time in the market is more important than timing the market. The strong retention in regular plans for over 5 years underscores the power of long-term compounding and disciplined investing. Regardless of whether an investor chooses a direct or regular plan, the key to SIP success lies in consistency and a long-term outlook. The significant 253% growth in SIPs held for more than 5 years in regular plans suggests that investors who seek financial advice tend to stay invested longer.

At the same time, direct plans attract more short-term investors, with 30% of AUM in direct plans being active for less than a year. While direct plans are cost-effective, many investors may be actively managing their portfolios, leading to shorter investment durations. More than 20.96 million SIPs in direct plans have been active for less than a year, compared to 25.47 million in regular plans. The relatively higher share of short-term SIPs in direct plans indicates that investors managing their own portfolios may opt out sooner, possibly due to market volatility or lack of advisory guidance. We might witness SIPs in manufacturing, defence, and innovation funds getting stopped in coming data analysis from the industry since most of them were DIY type of investments.

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