Retail Investor Participation in Indian Stock Market

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Indians for long have considered investing in equity a risky bet and even today, many of our  family heads stay away from it. They have a strong tilt towards saving options like bank deposits  and small savings instruments, which offered good, stable and low-risk returns. But, as interest  rates fell against the inflation rate and with the advent of technology, investing in stock  markets is barnstorming in India, and it’s the younger investors, including chiliads, who are  driving the big move. 

The BSE has crossed 7 crore registered users based on unique client code this month wherein 38% are in the 30-40 age bracket, followed by 24% in the age of 20-30. It is vital to note that  the numbers of users with age of less than or equal to 20 now account for 11% as of October,  2021. The jump in the registered users from 6 crores has happened in 139 days. The two main  depositories of Indian stock market together added 14.3mn. new investors in the year ended  March 2021. The share of individual investors in the cash market turnover also rose to 45% in  2020-21. 

Technology has made everything easy, so is the case with share market trading at fingertips  which is a great reason why many find it convenient to invest in stocks. New-age Fin-Techs and  even the traditional full service broking firms have invested a lot in technology, which has made  it faster to open a trading account, and buy-hold-sell shares in minutes using an application. 

Favorable demographics, rising financial literacy and deepening internet has aided the Fin-Tech  industry’s rapid growth. More than 75% of the new investors are between the ages of 18 and  36, and includes 65% of the first-time investors registering on investing apps. Economical trading, handy smartphones and simplified trading applications has made it possible for a mass, across age groups to trade with ease. This has also motivated investors from non-metropolitan  cities to equity investing in a big way. 

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