SIPs become cushion against FPI selling

In March 2020, India implemented a strict lockdown due to the pandemic, causing panic among investors. Foreign funds sold off a significant amount of stocks, leading to a 40% decline in the sensex. Meanwhile, domestic funds received inflows through the systematic investment plan (SIP) route. The lockdown also accelerated digital adoption, with increased participation in banking services, insurance, and trading. The combination of Jan Dhan accounts, Aadhaar-enabled KYC, and affordable mobile data prices boosted retail participation in the market. As investor interest grew, people turned to mutual funds for investing, benefitting from the expertise of fund managers.