One in Every Five Homes in India Connected to Stock Markets

resr 5paisa Research Team

Last Updated: 5th February 2025 - 02:30 pm

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A recent report by the National Stock Exchange (NSE) reveals that one in five Indian households is now connected to the stock markets. This shift comes as the total market capitalization of Indian companies has surged sixfold over the past decade.

According to the report, the number of stock market-linked accounts has surpassed 21 crore, with over 18 crore demat accounts. Notably, the most recent two crore investors joined at an accelerated pace—each crore in just over five months. The year 2024 saw a record-breaking 2.32 crore new investors, the highest ever in a single year.

The report stated, "A fifth of Indian households have a link to the markets today, as the market capitalization of Indian companies has increased six times in this period."

Additionally, the report underscored the substantial wealth accumulation for Indian households through stock market investments. Over the past five years, household wealth in Indian equities has risen by more than ₹40 lakh crore, with ₹28 lakh crore gained in the last three years alone. In 2024, investors experienced a wealth increase of ₹13.2 lakh crore.

These wealth figures are based on annual changes in individual holdings in NSE-listed firms, factoring in both direct stock investments and mutual fund participation.

NSE further noted, "The household wealth in Indian equities has increased by over ₹40 lakh crore in the last five years and by more than ₹28 lakh crore in the last three years."

The estimation assumes that individuals hold mutual fund investments in proportion to their overall equity assets under management.

Despite market fluctuations, Indian investors remain optimistic about the stock markets. As of September 2024, individual investors—both direct and indirect—account for 17.6% of the Indian stock market, marking a notable rise from previous years.

This ownership share is now nearly on par with that of foreign portfolio investors (FPIs), whose holdings exceeded individual ownership by 7.1 percentage points in FY21.

The report also observed that while FPIs have been pulling out funds, robust domestic investments have maintained market stability. With increasing investor participation and continued wealth creation, Indian households' involvement in equities is expected to grow further.

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