One in Five Indian Households Now Linked to Stock Markets, Wealth Rises by Rs. 40 Lakh
Team Finance Saathi
05/Feb/2025
What's covered under the Article:
- Indian households linked to stock markets grow significantly, with a sixfold increase in market cap over a decade.
- In 2024, India saw a record 2.32 crore new investors, contributing to a wealth surge of Rs. 13.2 lakh crore.
- Domestic investors now own 17.6% of India's stock market, almost matching foreign portfolio investors' share.
In recent years, India's stock market has witnessed a surge in participation, with a significant rise in the number of households investing in equities. According to a report by the National Stock Exchange (NSE), one in five Indian households is now linked to the stock markets, a substantial increase in financial inclusion and participation. This surge has been accompanied by an incredible sixfold increase in market capitalization of Indian companies over the past decade.
In 2024 alone, the number of new stock market investors reached a record-breaking 2.32 crore, the highest-ever in a single year. This growth has significantly contributed to wealth creation for Indian households, with the total increase in equity investments amounting to a staggering Rs. 40,00,000 crore (US$ 459.24 billion) over the past five years. Of this, Rs. 13.2 lakh crore (US$ 151.55 billion) was added in just the year 2024.
The report highlights that despite market fluctuations, Indian investors continue to demonstrate remarkable confidence in the stock markets. As of September 2024, individual investors directly and indirectly own 17.6% of the Indian stock market, nearly equal to the share held by foreign portfolio investors (FPIs), which had traditionally been higher. In recent years, there has been a noticeable trend of FPIs withdrawing funds, yet robust domestic inflows have helped stabilize the market. This trend is expected to continue, with more and more Indian households becoming part of the stock market journey, contributing to further wealth creation and financial empowerment.
In addition, the increasing participation of domestic investors in equity markets is a sign of India's growing economic strength. This rise in domestic investment also demonstrates a shift in investor sentiment, as more people are looking for avenues of wealth creation beyond traditional savings accounts and fixed deposits. As equity investments continue to grow, Indian investors are positioning themselves to take advantage of the long-term wealth-building potential that the stock markets offer.
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