Retail investors and mutual funds now own 36% of Nifty 50 free float, says SEBI chief

SEBI chairman Tuhin Kanta Pandey says retail participation and domestic mutual funds now account for 36% of the free float market capitalisation of Nifty 50 companies.

• Individuals, domestic funds hold 36% of Nifty 50 free float
• Financial sector's Nifty weight increased from 21% to 38%
• NSE companies' market cap surpasses 130% of India's GDP

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Individuals and domestic mutual funds together now hold about 36 percent of the free float market capitalisation of Nifty 50 companies, SEBI Chairman Tuhin Kanta Pandey said while addressing the 30th anniversary of the Nifty 50 index at the National Stock Exchange (NSE).

Pandey said the change reflects a significant shift in the ownership structure of India’s benchmark equity index as domestic participation in capital markets has expanded.

“As India's economy expanded and diversified, the composition and performance of the Nifty reflected these changes. Individuals and domestic mutual funds together now hold about 36% of the free float market capitalisation of Nifty 50 companies,” Pandey said during his address on Monday.

Pandey said the composition of the Nifty index has evolved alongside changes in the structure of the Indian economy over the past three decades.

“Over the last three decades, we have witnessed the rise of new industries and the expansion of existing ones, from information technology and financial services to telecommunications, consumption-driven businesses, and several new-age sectors,” he said.

According to Pandey, the financial sector’s weight in the index has increased significantly, rising from about 21 percent at the time of launch to nearly 38 percent as of February 2025.

Pandey also highlighted the growth in participation by retail investors in India’s capital markets.

“India today has over 140 million unique investors,” he said, describing the trend as a steady shift of household savings towards capital markets.

This increase in participation has coincided with the expansion of the country’s listed equity market. Pandey said the market capitalisation of companies listed on the NSE now exceeds 130 percent of India’s GDP, compared with around 35 percent in fiscal year 1995.

Pandey said India’s market infrastructure has also evolved alongside the growth of the equity ecosystem.

“Today, India's exchanges rank among the most active globally. Our markets host one of the largest numbers of listed companies, facilitate a very large number of IPOs each year, and account for one of the highest volumes of derivative contracts traded worldwide,” he said.

He added that India has also emerged as a major global market in terms of operational efficiency.

Pandey cited faster settlement cycles and shorter listing timelines as key benchmarks that reflect improvements in market infrastructure.

Pandey said India’s exchanges operate in a framework where competition and cooperation coexist.

“An important feature of our market ecosystem is that while exchanges compete with each other, they also collaborate when it comes to strengthening system-wide resilience,” he said.

He pointed to initiatives including common contract nodes, interoperability across exchanges and clearing corporations, and alternate trading arrangements as examples of coordination within the market infrastructure.

According to Pandey, these developments reflect the evolution of a deeper and more mature market ecosystem that supports the continued integration of domestic savings into the formal financial system.