Low-ticket 'Chhoti SIPs' of ₹250 have grown to 3.22 lakh investors by June 2026. Despite this rise, high discontinuation rates remain a challenge, with many first-time investors struggling to maintain payments due to market volatility and household budget pressures.
The 'Chhoti SIP' initiative, launched by the Securities and Exchange Board of India (SEBI) in February 2025 to increase financial inclusion, is seeing rapid growth in user participation. Official data shows the number of these small-ticket SIPs—where investors commit as little as ₹250 per month—has climbed to 322,000 by June 2026, a notable increase from the 197,000 recorded in April 2025.
Challenges in Maintaining Small-Ticket Investments
While new investor registrations are rising, the segment is struggling with high churn. In May 2026 alone, over 26,000 of these SIPs were closed. Since September 2025, the industry has seen a trend where monthly closures often offset a significant portion of new additions. Industry bodies, including the Association of Mutual Funds in India (AMFI), point to market volatility and inflation as primary reasons for this instability. Geopolitical tensions, particularly in West Asia, have influenced market sentiment and increased costs for essential goods, directly impacting the disposable income of the first-time investors who typically opt for these low-ticket plans.
Impact on Fund Houses and Profitability
To make these small investments viable, SEBI introduced subsidies for onboarding, KYC compliance, and payment processing for the first three ₹250 SIPs per investor. The regulator aimed for fund houses to reach break-even on these accounts within two years. However, the high rate of discontinuation complicates this goal. For example, SBI Mutual Fund, which launched its 'Jan Nivesh SIP' to cater to this segment, reported a 35.64% discontinuation rate as of April 1, 2026. Out of 81,570 registrations in the previous financial year, nearly 29,072 had ceased, highlighting the difficulty of retaining investors who have lower financial buffers.
Asset Growth Amidst Market Volatility
Despite the frequent closures, the total Assets Under Management (AUM) for the Chhoti SIP scheme has shown resilience, nearly doubling from ₹96.74 crore in April 2025 to ₹184.2 crore by May 2026. The broader small-ticket SIP category, including plans below ₹250, now manages roughly ₹2,000 crore. While the industry faces a 95% overall SIP discontinuation rate across all categories as of May, the churn in Chhoti SIPs remains a critical focus due to the specific goal of bringing new, less-experienced participants into the equity market.
Moving forward, the primary monitorable for investors and regulators will be whether retention rates improve as these investors gain familiarity with market cycles. Industry participants suggest that sustained financial education and guidance will be essential to help first-time investors navigate periods of high volatility without withdrawing their capital prematurely.