Inflows into equity mutual fund schemes dipped 68 per cent in April to ₹6,480 crore against ₹20,534 crore logged in March, largely due to investors booking profit as the market bounced back after a long lull.

The drop in net flows could also be attributed to a sharp fall of 34 per cent MoM in gross purchases and a steady rise of 9 per cent in redemption.

Except for focused fund, all other categories registered a positive inflow with small cap topping the table with an inflow of ₹2,182 crore, while it was ₹1,791 crore in mid-cap funds, according to the Association of Mutual Funds in India data released on Thursday.

Interestingly, inflow through the systematic investment plan also dropped four per cent to ₹13,727 crore (₹14,276 crore). The number of new SIPs opened in April was down 10 per cent to 19.55 lakh last month against 21.65 lakh in March.

NS Venkatesh, CEO, AMFI said the SIP flow was lower by ₹549 crore as the deduction marked for April 30 could not be executed as it was a holiday and this money will be accounted in May.

“We expect SIP inflow to remain strong and touch ₹17,000-18,000 crore a month by this fiscal end,” he added.

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The unclaimed dividend in the MF industry was at ₹1,650 crore and the non-delivered redemption proceeds were ₹970 crore as of March-end. This is much less than ₹35,000 crore of unclaimed deposits lying with the banks and AMFI is working with SEBI to bring down unclaimed money in the MF industry, he said.

Hybrid schemes recorded a net inflow of ₹3,317 crore with arbitrage and multi-asset allocation funds attracting ₹3,716 crore and ₹445 crore, while other categories registered a minor outflow.

Despite the removal of long-term capital gain tax benefit, debt funds received an inflow of ₹1.06 lakh crore. Inflows were largely in liquid fund ₹63,219 crore, money market at ₹13,961 crore, and ultra short duration funds at ₹10,663 crore.

Himanshu Srivastava, Associate Director, Morningstar India said given the recent sharp uptick in the markets, investors have chosen to wait for a more opportune time to invest into equities.

A steady decline in crude oil prices, earnings of major companies on expected lines, and a potential pause on further interest rate hike were some of the positive drivers of the market last month, he added.

Manish Mehta, National Head Sales, Kotak Mahindra AMC said after good inflows in March, investors have taken a wait-and-watch approach to allocate additional investments to equity last month, while continuing with their existing SIPs.