Retail investor surge lifts India’s capital markets, economic survey shows

India’s capital markets have seen a sharp rise in retail participation, with more than 23.5 million new demat accounts added during the current financial year up to December, according to the Economic Survey 2025–26 presented in Parliament on Thursday.

The increase highlights growing financial awareness and confidence among Indian households, even as global markets continue to be shaped by trade uncertainty and geopolitical tensions.

The Survey noted that India’s equity markets delivered steady and resilient performance between April and December 2025, despite fluctuating foreign investment flows. Over the period, the Nifty index rose by about 11.1 per cent, while the Sensex gained nearly 10.1 per cent. The gains were supported by strong domestic investor participation, improving corporate earnings and policy measures including tax relief, easing inflation and an accommodative monetary stance.

A key milestone during the year was the number of unique demat investors crossing 120 million in September, with women accounting for nearly one-quarter of the total. Investor participation also broadened geographically, extending well beyond major urban centres.

The mutual fund industry recorded around 59 million unique investors by December, with roughly 35 million coming from non-tier I and tier II cities, underscoring the growing reach of financial markets across smaller towns and regions.

According to the Survey, household savings are increasingly being channelled into equities and mutual funds. The share of these instruments in annual household financial savings has risen from around 2 per cent in FY12 to more than 15 per cent in FY25.

This shift has been fuelled by a sharp rise in systematic investment plan (SIP) contributions. Average monthly SIP inflows have climbed from less than Rs 4,000 crore in FY17 to over Rs 28,000 crore so far in FY26.

Primary market activity also strengthened, with initial public offering volumes rising by about 20 per cent compared with the previous year, while funds raised increased by 10 per cent. Small and medium enterprise listings continued to expand, with 217 companies listed so far this year, collectively raising more than Rs 9,600 crore.

The corporate bond market recorded sustained growth as well, expanding at an average annual rate of around 12 per cent over the past decade. Outstanding corporate bond issuances reached Rs 53.6 trillion in FY25, with fresh issuances touching a record Rs 9.9 trillion during the year.

With IANS inputs