With more and more retail investors getting inclined to the systematic investment plans (SIPs) to park their funds, brokerages are going all-out to attract investors.
As a result, a number of traditional brokerages such as like Geojit, Motilal Oswal, and HDFC Securities among others are aggressively chasing investors as they clock big strides in the distribution of this investment tool, if the industry data is any indication.
According to the industry data from CAMS, for the first five months of the current fiscal year, top 26 mutual fund distributors (excluding banks) together added around five lakh new SIP accounts during the period as the total number of live SIPs rose over 11 per cent.
Distributors like Geojit BNP Paribas Financial Services, HDFC Securities, Motilal Oswal Securities, Reliance Securities and Sharekhan, which are traditionally better known for their retail broking businesses, are now among the leaders in attracting new SIPs.
The Kochi-based Geojit with fresh SIP accounts worth Rs 16 crore registered a whopping 83.8 per cent growth during this period, making it the fastest growing player going by value of sales. The total investment through SIP route cumulatively by brokerages stood at Rs 644.9 crore as against Rs 550.84 crore, registering a growth of 17 per cent between April and August.
Going by the numbers of the accounts, it increased from 21.15 lakh to 23.99 lakh during the period, as per the CAMS data. These 26 distributors together account for over 90 per cent of the business in the segment.
"Retail investors who are not in a position to make direct bulk investments in the stock markets are increasingly attracted to SIP which requires only small amounts. By investing in SIPs, the investor averages the cost of her purchases, which points to the reason for this rising demand," Geojit BNP Paribas executive director Satish Menon told PTI.
Mumbai-based HDFC Securities came second with a growth of 60 per cent during the period, as their SIP book increased from Rs 20.41 crore to Rs 32.65 crore, while Motilal Oswal grew at 50 per cent with their book increasing from Rs 6.81 crore to Rs 10.4 crore.
NJ India Invest, the top player in the segment, expanded its SIP book from Rs 325.39 crore to Rs 364.64 crore, registering 12 per cent growth. Out of these 26 players, as many as 12 recorded a double-digit growth during the period under review.
Menon said Geojit started selling SIPs of mutual funds
in a small way five years ago and they have seen that all those clients who came through the SIP route are making money now. This gave them the confidence to push this product aggressively, he said.
Even in terms of adding new SIP accounts, Geojit led the pack with an expansion of its book by 39,983 new accounts, registering a growth of 47 per cent. Geojit was followed by HDFC Securities with 29,031 accounts growing at 49 per cent and Motilal Oswal grew the fastest at 54 per cent adding 8,764 new accounts.
Menon said their SIP numbers have considerably gone up with an increasing number of investors availing their expertise to invest in mutual funds through SIPs.
"We have been tremendously successful in increasing our SIP clientele and the numbers speak for themselves. Among national distributors, we have the highest growth in the SIP book for April-August period, increasing it from Rs 20 crore to Rs 40 crore," Menon said.
HDFC Securities managing director and chief executive Dhiraj Relli attributed the faster growth to investors' proclivity to sail across the market volatility.
"Accordingly, wealth creation through SIPs has been our key message to our retail investors. SIP has been the best route. Of late awareness of SIP has increased significantly," Relli told
