Explained: What's driving increased retail participation in Indian stock market?
demat accounts and robust inflows into mutual funds. Millennials, in particular, are actively investing in equities, mutual funds and ETFs. This robust participation has been a key factor behind the unprecedented surge in Indian equities in recent years.
It has also prompted many firms to raise funds through the stock market route to capitalise on the growing demand from retail investors. Also Read: Demat Account: How to create long-term wealth? Follow these 6 key steps The participation has not only broadened the investor base but has also provided a strong foundation for the market. Amidst challenges such as high FPI (foreign portfolio investor) outflows, the increasing participation of retail investors acts as a cushion, contributing to market resilience and stability.
The Indian household sector plays a crucial role in the Indian economy, contributing significantly to the total gross domestic savings. Traditionally, Indians have favored bank deposits for their savings due to their perceived safety and stability, showing less interest in the stock market because of its perceived volatility and complexity. Also Read: How does a demat account contribute to financial inclusion? MintGenie explains However, recent trends indicate a shift, with young investors increasingly willing to take on some risk by investing in the stock market and diversifying their portfolios beyond traditional assets.
Despite the challenges posed by geopolitical tensions, the resilience of the Indian equity capital market has been remarkable, encouraging more investors to participate in the stock market. Amid this backdrop, a record 32 million demat accounts were opened in FY24, with 10 million added in the last quarter (Q4 FY24). According to a
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