Even as Indian markets staged a smart rebound through October and November, retail investors remained conspicuously absent from the rally, continuing to sell into rising prices.
NSE data shows retail participants offloaded nearly Rs 13,776 crore in October and another Rs 11,544 crore in November, marking back-to-back months of heavy selling despite improving market sentiment.
The disconnect is striking because benchmark indices clocked solid gains during the period. The Sensex and Nifty rose more than 4 percent in October and added another 2 percent in November.
Broader indices also showed strength in October, with the BSE MidCap index climbing 4.7 percent and the BSE SmallCap index gaining 3.22 percent. However, November turned choppy — MidCaps inched up just 0.4 percent while SmallCaps slipped 3.4 percent.
Analysts say retail investors have been tested by volatility since the start of the year. Even though the market began recovering in October and November, many small investors used the opportunity to book profits.
From January to September 2025, benchmark indices gained nearly 4 percent each, but the broader market struggled, with the BSE MidCap falling 3 percent and the SmallCap index dropping 5 percent. This divergence has further influenced retail behaviour.
“The strong rally in Gold and Silver has lured capital away from underperforming equities,” said Santosh Meena, Head of Research at Swastika Investmart. He added that while direct equity portfolios are being trimmed, the broader equity culture remains intact, with SIP flows holding firm and lump-sum money shifting toward Multi-Asset Allocation Funds as a buffer against volatility.
Gold and Silver have staged a stunning rally since the start of the year, drawing substantial investor interest away from equities. Gold has soared 61 percent in 2025 so far, while Silver has surged more than 96 percent, offering outsized returns at a time when parts of the equity market have remained volatile and uneven.
Adding to the diversion of retail money is the deluge of new public offerings. India has witnessed an unprecedented rush of IPOs this year, with nearly 95 companies launching issues worth a total of Rs 1.61 lakh crore — the highest ever for any calendar year. This surpasses the previous record set in 2024, when around 91 firms raised an aggregate Rs 1.59 lakh crore.
According to Vinod Nair, Head of Research at Geojit Investments, a liquidity squeeze triggered by a crowded IPO pipeline, along with promoter selling and FII withdrawals, has dampened retail appetite.
He noted that many investors have temporarily moved toward safer assets such as gold, fixed deposits and cash — a trend amplified during the festive and wedding season. With major indices retesting all-time highs, profit booking has increased, especially ahead of key events such as the India–US trade deal and the upcoming Fed and RBI policy decisions.
Despite the current caution, Nair believes the broader sentiment remains constructive. Retail investors, he said, are likely to continue following a buy-on-dips approach as the outlook for 2026 stays favourable.
Retail investor participation has remained lacklustre through 2025, with small investors turning net sellers for much of the year. So far, retail investors have offloaded nearly Rs 17,900 crore — a sharp reversal from 2024, when they had collectively invested Rs 1.66 lakh crore. Buying was limited to just four months — January, February, July and August — while the rest of the year saw consistent selling.
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