India Capital Market Sees Surge in Investors: Economic Survey

New Delhi, Jan 31 (PTI) Healthy corporate earnings, stable macro fundamentals and online digital investment platforms have encouraged greater investors' participation in the capital markets with the number of unique investors rising to 11 crore, the Economic Survey said on Friday.

This increased investors' participation, coupled with robust gains generated by equities has created significant household wealth over the last few years.

As per the NSE's estimates, household wealth in Indian equities has increased by over Rs 40 lakh crore in the last five years (2020-2024; as of September 2024).

Overall, the participation of investors in the capital market has increased through direct (trading in markets through their accounts) and indirect (through mutual funds) channels.

The unique investor base at the National Stock Exchange (NSE) surpassed the 10-crore mark in August 2024, tripling in the last four years, and currently stands at 10.9 crore (as of December 26, 2024).

The number of client codes, indicating a number of investor accounts at NSE, has risen from a little under six crore at the end of 2019 to nearly 21 crore as of December 2024.

"Healthy corporate earnings, stable macro fundamentals, efficient and robust technology architecture facilitating efficient trading, clearing, and depository systems, and trust garnered by the mutual fund ecosystem and online digital investment platforms have encouraged greater participation in capital markets," the survey for 2024-25 tabled in the Parliament said.

The incremental addition to demat accounts has been continuously increasing, with the number of demat accounts rising sharply by 33 per cent to 18.5 crore at the end of December 2024 on a year-on-year basis.

In the equity cash segment, individual investors turnover 41 was 35.6 per cent from April to December 2024. There are 11.5 crore unique investors with demat accounts and 5.6 crore unique investors in mutual funds at the end of December 2024.

"Higher investor participation has engendered a self-reinforcing cycle of strong market returns, bringing in even more investors. This, in turn, will eventually transform the securities market into a more diverse, inclusive, and robust platform for wealth creation," the Survey said.

The mutual fund industry, which is crucial in channelling financial savings, has witnessed a doubling of unique investors from 2.9 crore in FY21 to 5.6 crore as of December 2024.

Moreover, the total number of folios increased from 17.8 crore at the end of FY24 to 22.5 crore at the end of December 2024, and retail investors held mutual fund units worth Rs 18.6 lakh crore.

This surge in participation, coupled with strong market performance, has led to a remarkable increase in mutual funds' Assets Under Management (AuM), which rose to Rs 66.9 lakh crore as of December 2024, registering 25.3 per cent growth from March 2024.

The mutual fund segment presently has more than 10 crore Systematic Investment Plan (SIP) accounts, with cumulative SIP inflows of Rs 10.9 lakh crore since inception.

"Monthly average gross SIP flows have more than doubled in the last three years, from Rs 0.10 lakh crore in FY22 to Rs 0.23 lakh crore in FY25," the survey noted.

Supported by these sustained inflows, mutual fund ownership in Indian listed companies has risen to a fresh all-time high of 9.5 per cent in the quarter ended September 2024, from 8.7 per cent in FY24.