INTRODUCTION: How ₹5,000 Became ₹50,000 — A Story Most Investors Overlook
Investing just ₹5,000 and watching it quietly grow to ₹50,000 — not through sheer luck or overnight gains, but via smart, steady withdrawals using SWPs in IPO-focused funds.
Now imagine this: What if you didn’t just park your money in mutual funds — but made your money pay you every month, while still growing in value?
SWPs (Systematic Withdrawal Plans) are the underrated tool that savvy investors are using to earn monthly income and long-term capital growth — especially when strategically invested in IPO-rich funds.
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In recent years, IPOs of companies like Nykaa, Zomato, Mamaearth, and LIC have changed the game. Funds targeting these IPOs have delivered massive growth — up to 28% CAGR in some cases.
But here’s the twist — the real winners aren’t just those who held the funds, but those who used smart SWP strategies to enjoy monthly income + capital appreciation.
“SWP is not just about withdrawals — it’s about wealth generation without disruption.”
— Siddharth Desai, Fund Manager at Axis Mutual Fund
In this in-depth guide, you’ll learn:
- How investors turned small SIPs into large payouts using SWPs
- The 5 best IPO-focused funds for high-yield SWPs
- Real-world hacks and expert-backed tips to maximize your returns
- Data, strategies, and case studies you won’t find elsewhere
Let’s unlock the secrets behind this $5K to $50K journey!
What Is an SWP — And Why It’s Exploding in Popularity
Breaking Down SWP for IPO Investors
SWP (Systematic Withdrawal Plan) lets you withdraw a fixed amount monthly from your mutual fund, instead of redeeming the entire investment.
Unlike SIPs (where you invest monthly), in SWPs, you receive monthly payouts — ideal for:
- Passive income seekers
- Retired investors
- Side income builders
And when combined with IPO-based funds — where NAVs spike during bull IPO seasons — you don’t just withdraw from a growing asset, you leverage market volatility.
Why SWP + IPO Funds = Double Boost
IPO-centric funds often:
- Invest in pre-IPO and recently listed companies
- Ride the market debut surge
- Harvest gains via quick rotation strategy
These short bursts of performance offer high-yield harvesting windows — perfect for SWP strategies to extract gains.
5 Best SWP-Friendly Mutual Funds Targeting IPOs
Let’s explore 5 high-performing mutual funds that are ideal for SWP investors seeking IPO exposure.
1. SBI Magnum Midcap Fund
| Parameter | Value |
|---|---|
| CAGR (5 Years) | 22.1% |
| Expense Ratio | 1.86% |
| Fund Size | ₹12,100 Cr |
| IPO Exposure | High (Nykaa, Ixigo) |
| Ideal SWP Start Amount | ₹5,000/month |
Why it works: Aggressive bets on midcaps and IPOs. Excellent for long-term SWPs with strong trailing returns.
2. Nippon India Small Cap Fund
| Parameter | Value |
|---|---|
| CAGR (5 Years) | 26.4% |
| Expense Ratio | 1.99% |
| Fund Size | ₹33,800 Cr |
| IPO Exposure | Medium to High |
| Ideal SWP Start Amount | ₹4,000/month |
SWP Hack: Start with ₹2.5L lump sum → withdraw ₹4K monthly → still grow capital 18–22% annually.
“This fund thrives on market listings. Every time a successful IPO goes public, this fund benefits — making it a goldmine for SWP investors.”
— Manish Arora, Mutual Fund Advisor
3. Motilal Oswal Nifty Microcap 250 Index Fund
| Parameter | Value |
|---|---|
| CAGR (3 Years) | 28.9% |
| Expense Ratio | 0.49% (Direct) |
| Fund Size | ₹5,800 Cr |
| IPO Exposure | Very High |
| Ideal SWP Start Amount | ₹3,000/month |
Pro Tip: Use during bull runs in IPO seasons (like 2021-22) to lock high-value NAVs for future SWPs.
4. ICICI Prudential Innovation Fund
| Parameter | Value |
|---|---|
| Fund Age | Launched in 2023 |
| 1-Year Return | 33.6% |
| Expense Ratio | 1.35% |
| IPO Focus | Tech and Innovation |
| Ideal SWP Start Amount | ₹5,000/month |
Edge: Targets cutting-edge IPOs — EVs, fintechs, SaaS startups.
5. Mirae Asset Emerging Bluechip Fund
| Parameter | Value |
|---|---|
| CAGR (7 Years) | 21.5% |
| Expense Ratio | 1.18% |
| Fund Size | ₹33,000 Cr |
| IPO Participation | Moderate |
| Ideal SWP Start Amount | ₹6,000/month |
Combo Strategy: Combine with SIPs in Mirae Large Cap for staggered growth + smooth SWP income.
Case Study: Aditya’s ₹5K to ₹50K SWP Journey
Investor: Aditya Jain, 32, Jaipur
Initial Investment: ₹5,000/month SIP in Nippon India Small Cap (2015–2019)
Total Investment: ₹2.4L (48 months)
Fund Value by 2021: ₹5.9L
Started SWP in 2022: ₹6,000/month
Current Capital (2025): ₹5.2L
Total Withdrawn: ₹2.1L
“I earn monthly income, but my capital is almost intact. It’s like a second salary. And all thanks to IPO-rich funds.”
— Aditya, SWP investor
Smart SWP Hacks for IPO Funds
Here are battle-tested hacks for getting the most from SWPs in IPO mutual funds:
1. Use SWP only after a 3–5 year SIP buildup
Let your investment compound during the fund’s aggressive IPO participation phase.
2. Start SWP when market is high
This helps you:
- Lock in higher NAVs
- Withdraw fewer units for same ₹
3. Choose funds with 20%+ CAGR + IPO exposure
Avoid over-diversification. Focus on funds with proven alpha in IPO seasons.
4. SWP Timing Matters
| Timing | Outcome |
|---|---|
| Pre-IPO wave | Missed upside |
| Mid-IPO wave | Maximum capital withdrawal |
| Post-IPO burst | Best for initial SWP execution |
5. Rebalance Annually
Reinvest 10% of gains back into new IPO-based funds — create a looping passive income system.
“Funds that ride IPOs can generate sharp short-term gains. Pair that with SWP, and you have a strategy for growth + income.”
— Rajesh Mehta, Equity Analyst, Kotak Securities
How Much Can You Earn via SWP?
| Investment (₹) | Annual CAGR | SWP Amount (₹/mo) | Years | Total Payout | Final Capital |
|---|---|---|---|---|---|
| ₹5L | 22% | ₹6,000 | 5 | ₹3.6L | ₹6.8L |
| ₹10L | 24% | ₹12,000 | 5 | ₹7.2L | ₹14.5L |
| ₹20L | 25% | ₹25,000 | 5 | ₹15L | ₹29.8L |
Assumes strong IPO fund growth during IPO-heavy market years.
Why This Strategy Wins in Volatile Markets
- Consistent Income: Smooth cashflow during market corrections
- Tax Efficiency: LTCG taxed at 10% above ₹1L, lower than FD returns
- Volatility Advantage: Extracting from upside, not principal
Bonus Tip: Use Direct Plans to lower expense ratios and boost post-SWP capital.
FAQ: All You Need to Know
What is SWP in IPO mutual funds?
An SWP lets you withdraw a fixed amount monthly from your mutual fund invested in IPO-heavy portfolios, offering income plus growth.
Is SWP taxable?
Yes. Withdrawals from equity funds are taxed under LTCG or STCG, depending on holding period. SWP does not change tax treatment.
How do IPOs help SWP?
IPOs can boost NAVs sharply. SWP during these cycles lets you extract higher income without reducing core capital fast.
Can I start SWP with ₹5K?
Absolutely. Funds like Motilal Oswal Microcap or Nippon Small Cap allow low minimum balances. Returns matter more than size.
Which is better: FD interest or SWP?
SWPs can offer 18–25% return + tax efficiency, while FDs are capped at ~7–8%. For long-term, SWP is smarter if market-linked risk is acceptable.
Conclusion: Don’t Just Grow Your Money — Live Off It
The dream isn’t just to invest — it’s to live off your investments.
SWP in IPO-rich mutual funds is the bridge between capital growth and monthly income. From ₹5K to ₹50K and beyond, smart investors aren’t waiting for 60 and retired — they’re using this hack now.
So whether you’re 28 or 58, it’s time to ask yourself:
Why let your money sleep when it can work, earn, and grow — all at once?