Over 9.5 crore retail investors directly own nearly 10 percent of the stock market through as many as 2,500 listed companies, said the latest Economic Survey, translating into Rs 36 lakh crore worth of shareholder wealth as of March 2024.
This is over and above the Rs 28 lakh crore as indirect ownership of listed companies through mutual funds that the Indian investors are holding, thus widening India's overall market now placed at fifth position in the global ranking of total market capitalisation. In May 2024, Indian stock markets touched a high of $5 trillion in terms of equity market capitalisation.
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FY24 has been a 'spectacular year' for mutual funds, said the Economic Survey, with the AUM rising by a year-on-year growth of 35 per cent to Rs 53.4 lakh crore. The total number of folios rose from 14.6 crore in FY23 to 17.8 crore at the end of FY24.
As many as 8.4 crore systematic investment plan (SIP) accounts exist as of March 2024, resulting in an annual net SIP flow of Rs 2 lakh crore, which has doubled in the last three years. The total SIP AUM now makes up roughly 35 per cent of that for equity schemes in the mutual fund industry, according to the latest Economic Survey.
The Economic Survey noted that the use of technology has played a crucial part in this expansion of stock market.
"The proliferation of technology has been a critical catalyst in transforming economies worldwide, and the Indian capital markets have been no exception. The sector has continuously transformed over the past few years, leveraging technological advancements to facilitate growth and efficiency", it said.
Technological integration, push for financial inclusion, digital infrastructure, smartphone penetration and the low cost brokerages, all have contributed to the expansion of the pool of retail investors, said the Economic Survey.
However, this proliferation is being tempered by a tone of restraint in the Economic Survey document, which added that "India needs to have an orderly and gradual evolution of the financial market", and capital market must deploy household savings towards productive investments.
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India's registered investor base has nearly tripled from the time the Covid-19 pandemic struck, to rise 9.2 crore as of March 2024, potentially translating into 20 per cent households now channelling their household savings into financial instruments, said the Survey.
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