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Inflows into Indian equity mutual funds halved sequentially to 32.4 billion rupees in May, the lowest since November 2022, data from the Association of Mutual Funds in India (AMFI) showed on Friday.

Equity mutual fund inflows had fallen to a five-month low of 64.80 billion rupees in April.

The slide in equity mutual fund inflows was offset by steady foreign inflows in domestic equities, prompting a 2.60% rise in the Nifty 50 index in May.

Contributions through systematic investment plans (SIPs) - in which investors make regular payments into mutual funds - rose 7.44% from the previous month to a record 147.49 billion rupees in May. Over 1.05 million new SIP accounts were opened last month.

"More working days in May and the preference of retail investors to utilise mutual funds to invest in equity markets propelled SIPs to record highs," said AMFI Chief Executive NS Venkatesh.

"The rotation of money into small-caps which are expected to rise after a steep correction and profit booking with index nearing record levels triggered moderation in large-caps, midcaps and multicaps," Venkatesh added.

Among equity-oriented schemes, small-cap funds accounted for most of the investments for the eighth straight month at a record high of 32.83 billion rupees, in contrast to outflows worth 13.62 billion rupees from large-cap funds, AMFI data showed.

Equity-oriented mutual fund schemes have seen net inflows for 27 months in a row since February 2021.

The mutual fund industry, including debt, equity, hybrid and other schemes, saw net inflows fall 53% to 574.2 billion rupees, AMFI data showed.

The average assets under management rose to 42.94 trillion rupees from 41.53 trillion rupees in April.

($1 = 81.8020 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; editing by Eileen Soreng)