The equity market in India faced an extended selloff in February 2025, largely driven by tariff-related jitters, earnings slowdown, and concerns over valuation levels. These factors significantly impacted investor sentiment, contributing to a sharp 31.2% decline in new investor registrations on the National Stock Exchange (NSE) compared to the previous month. The decline was widespread across all states, with no region spared from the downturn. However, despite the overall reduction in new registrations, Uttar Pradesh continued to lead the way in terms of the highest number of new investor additions, though even this populous state witnessed a nearly 27% fall in new registrations in February.

Regional Investor Trends:

The decline in new registrations was not uniform across all regions. While North India maintained the largest share of new registrations, accounting for 40.5% of the total registrations, West India saw the steepest drop in investor registrations, with a decline of over 41% compared to January. South India and East India also reported decreases of 26.8% and 24.7% in new investor registrations, respectively.

Despite the overall market slowdown, Uttar Pradesh emerged as the state with the most new registrations in February, with 1.6 lakh new investors joining the NSE. This was a noticeable drop from January’s total of 2.2 lakh registrations, but still ahead of other states such as Maharashtra (1.3 lakh), West Bengal (79,300), and Tamil Nadu (78,300).

Maharashtra, with its larger population and financial infrastructure, continued to have the largest share of the total registered investors on the NSE, accounting for 16.3% of the total investor base as of February. Uttar Pradesh followed closely with 11.3%, while other states like Gujarat, West Bengal, and Rajasthan held smaller portions of the total investor pool.

The Rise of Young Investors:

One of the most interesting trends observed in February was the sharp increase in younger investors entering the stock market. Individuals under the age of 30 years now represent 39.6% of the total investor base on the NSE. This is a notable jump from just 22.6% in March 2019. The mean age of investors has also decreased from 41.3 years in March 2019 to 35.8 years in February 2025, and the median age has dropped from 38 to 32 years during the same period.

The growing trend of young investors is in line with a broader digitalization of the investment space, where more tech-savvy and mobile-friendly platforms are attracting the youth to equity markets. This demographic shift indicates a future where the market could see further growth as millennials and Gen Z investors increase their participation.

Increased Female Participation:

Another significant development in February’s investor landscape was the strong rise in female participation in the stock market. Women now account for 24.3% of individual investor registrations, a notable increase from previous years. States such as Maharashtra, Gujarat, Tamil Nadu, and Karnataka saw higher female participation than the national average, with Maharashtra leading at 28.2%.

In contrast, states like Rajasthan, Madhya Pradesh, and Uttar Pradesh reported lower female participation, with Uttar Pradesh having the lowest at 18.5%. Interestingly, Lakshadweep had the lowest female representation at 15.2%, while Goa had the highest at 32.4%.

Overall Market Trends:

While the market may have faced a temporary slowdown in February, it is important to note that long-term growth potential remains, especially with the younger generation and women investors continuing to show interest in the stock market. These shifts in investor demographics could lead to more diverse market participation, contributing to increased market liquidity and potentially paving the way for more sustainable growth.

In conclusion, February’s selloff, though significant, reflects the cyclical nature of the market and the evolving investor base in India. As younger and female investors continue to make up a more substantial portion of the total investor base, it is clear that the Indian stock market is becoming increasingly diversified, both in terms of investor demographics and regional participation. With more young investors, regional diversity, and female involvement, the market seems poised for future growth, even amid short-term volatility.

The Current active IPO are Aten Papers & Foam Limited, Infonative Solutions Limited,Spinaroo Commercial Limited,Retaggio Industries Limited.

The Closed IPOs are  Identixweb Limited, ATC Energies System Limited, Shri Ahimsa Naturals Limited.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in .Choice Broking FinX

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.