Rising domestic investments have strengthened India’s equity markets, signalling a long-term shift in household savings patterns nationwide.
Mumbai
Domestic investors have emerged as the backbone of India’s equity markets, pumping nearly Rs 4.5 lakh crore into equities during the year through mutual funds and other indirect investment routes, according to a report released by the National Stock Exchange (NSE). This surge in investments highlights a clear and sustained shift in household savings away from traditional instruments such as fixed deposits, gold and small savings schemes, towards market-linked assets. The trend underlines the growing influence of retail investors in shaping market depth, liquidity and long-term stability.
The NSE report noted that India’s retail investor base has expanded rapidly in the post-pandemic period. The number of individual investors has grown more than fourfold, rising from nearly three crore in 2019 to over 12 crore by 2025. This sharp rise reflects increasing financial awareness, wider penetration of digital trading platforms, and easier access to investment products. It also points to a growing acceptance of equities and mutual funds as preferred tools for long-term wealth creation among Indian households.
Importantly, the expansion has not been limited to direct equity investments. A significant portion of new participation has come through mutual funds and other market-linked products, which have helped investors diversify risk while staying invested in equities. Since 2020, total household investments in market-linked instruments have reached approximately Rs 17 lakh crore, underscoring a structural transformation in India’s savings and investment behaviour.
The report emphasised that the rise in investor numbers has gone hand in hand with strong and consistent inflows into equities. Households alone contributed close to Rs 4.5 lakh crore during the current year, providing steady support to the markets even during periods of volatility. This domestic participation has added resilience and reduced the markets’ dependence on foreign capital.