Long-term SIP savers hold steady despite flat markets and higher RBI rates

Market Impact

A change in the Reserve Bank of India policy stance and rate hikes will impact companies with high debt or those dependent on short-term working capital. However, average corporate leverage in India is at decadal lows, making an all-round adverse impact unlikely according to Harsha Upadhyaya, chief investment officer at Kotak Mahindra AMC. While short-term SIP investors face a reality check, long-term savers remain exceptionally resilient.

Growth And Earnings

The RBI has upgraded its FY27 GDP growth forecast to 7.1 percent, supported by strong domestic demand. Repo rates now stand at 5.50 percent, and earnings expectations for the Nifty basket remain around 14 to 15 percent for FY2026-27. First-quarter earnings grew 17 percent year-on-year despite West Asian conflicts and energy shocks.

Primary Market Surge

The September quarter raised over 90,000 crore rupees, with an IPO pipeline reaching 3.86 trillion rupees across more than 200 companies. Traditional sectors like engineering, infrastructure, power, and manufacturing have overtaken tech as primary fund-raisers. Meanwhile, secondary equity markets are seeing massive block and bulk deals as private equity firms and promoters secure liquidity.

Context

Systematic Investment Plans let investors put small amounts into mutual funds regularly to build wealth over time. Central banks adjust repo rates to manage inflation, which directly influences borrowing costs across the wider economy.