SIP Stop-Ratio Surges From October 2024 – March 2025 As Market Corrects 15-20 Per Cent

After years of relentless inflows that made systematic investment plans (SIPs) the bedrock of India’s retail equity participation, the cracks are beginning to show. The SIP stop ratio—an indicator of how many investors discontinue their monthly investments—spiked alarmingly between late 2024 and early 2025, just as markets corrected by 15–20 per cent.

Instead of staying the course and accumulating units at lower valuations, many retail investors pulled the plug, revealing how behavioral biases and short-term pain still drive decision-making despite years of SIP evangelism.

SIP Stoppage Ratio Climbed 80 Per Cent In Sept-Oct 2024

The SIP stop ratio, which was hovering around 50–60 per cent in early to mid-2024, began rising from Sep–Oct 2024, climbing to 80 per cent and further spiking to 128 per cent by March 2025. This increase can largely be attributed to the falling markets, which delivered zero to negative returns over that one-year period compared to the high double-digit gains of the preceding years.

In April 2025, the number shot up to a historic 353 per cent. However, this was a one-time event caused by a cleanup of defunct SIP folios.

“Dormant accounts with negligible activity were closed which were artificially inflating the SIP stop count. Hence, this cannot be a reflection of investor sentiment, and does not point to mass investor exits,” says Rohan Goyal, Investment Research Analyst at MIRA Money, an investment platform.

By May–July 2025, the ratio came back down to the 60–70 per cent range as markets began showing signs of stability and mild recovery. The mutual fund SIP stoppage ratio again rose to 74.51 per cent in August 2025, up from 62.66 per cent in July 2025 and 57.15 per cent in August 2024.

Retail Investors Stop SIP As Portfolios Begin Showing Negative Returns

Retail investors stopped their SIPs when the markets started to fall and their portfolios started showing low/negative returns. This was the time when retail investors should have kept their SIPs intact if not increase them.

Why Falling Markets Are Best For Continuing SIPs

This is what is most concerning, the sharp rise in the SIP stop ratio during the Oct 2024–Mar 2025 period, when the markets corrected nearly 15–20 per cent. This was a phase where retail investors panicked and pulled the plug on their SIPs – exactly the opposite of what should have done.

“Falling markets present the best opportunity to continue SIPs, as they allow investors to accumulate more units at lower prices, average down costs, and position themselves for the next bull run,” informs Goyal.

For instance, an investor who began investing Rs 10,000 per month in January 2024 but stopped in January 2025 due to market declines would have invested only Rs 1.2 lakh. By September 10, 2025, his XIRR (Extended Internal Rate of Return)  would stand at just 5 per cent. In contrast, a conservative investor who continued SIPs through the ups and downs would have invested Rs 2 lakh and earned an XIRR of 6.1%

Conscientious investors not only put more money into their work but also make more money. This basic comparison indicates that leaving in a panic hurts long-term wealth building.

How Behavioural Bias Still Rules

Part of the reason investors acted this way lies in behavioral bias – particularly recency bias and loss aversion. When markets fall, the pain of short-term losses often outweighs long-term perspective, leading many to stop SIPs at the very time they should be continuing.

“The fact that the SIP stop ratio was at its highest when it should have been at its lowest, and vice versa, is most concerning, as it shows retail discipline breaking down at the very time it should have been the strongest,” says Goyal.