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45% hinterland investors looking to deploy money in cryptocurrencies: Groww Survey

The study polled individual investors across 357 centers including semi-urban and rural regions

February 21, 2022 / 09:48 AM IST
Representative image.

Representative image.

Despite multiple blows that Budget 2022 delivered to cryptocurrencies, they continue to be highly popular amongst Indian investors, a survey conducted by investment platform Groww has found.

The year 2021 witnessed frenzied investor enthusiasm for cryptocurrencies, as many were lured by stellar returns in a short span of time.  After Union Budget 2022, however, they had to deal with a triple whammy – 30 percent capital gains tax, 1 percent tax deductible at source (TDS) and no provision to offset or even carry forward the losses. Yet, this does not seem to have discouraged crypto investors. Around 45 percent are still willing to invest in cryptocurrencies in 2022, a survey conducted by investment platform Groww has found.

Cryptocurrencies are among the most volatile of all instruments. This is why experts advise savvy and new investors to choose systematic investment plan (SIPs) modes even to invest in crypto assets. Some exchanges such as Bitbns, Unocoin, Vauld, Zebpay and Giottus allow you to start SIPs in crypto assets. An SIP in a cryptocurrency saves you from big losses if the value of your coins were to suddenly come crashing down. Rishabh Parakh, a chartered accountant and founder of NRP Capitals says, “Avoid gambling in cryptos. Deploy only the amount that you can afford to lose.”

The study polled individual investors across 357 centers including semi-urban and rural regions. More than half (56.6 percent) of the responses came from Tier-4 markets such as Balasore, Medinipur, Ongole, Ballia, Deoria, Sikar, Nadia, Singabhum and Yadgir.

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Bullish sentiments all round, investors gung-ho about equities

Stock market turbulence since the beginning of 2022 notwithstanding, retail investors in India will continue to place their bets on equities this year, the survey found. Close to 42 per cent respondents are bullish on equities and 96 per cent of the respondents said that they would invest in stocks this year. A large majority (54 percent) said they were satisfied with their investments’ performance in 2021.

Encouraged by the performance of their investments in 2021, semi-urban and rural investors are willing to allocate a higher proportion of their savings to financial assets. A majority of respondents, i.e. 43.17 per cent investors are looking to direct 10-25 percent of their income towards financial assets in 2022. According to the survey, about 9.21 per cent of those polled are willing to invest more than half their income and another 7.97 per cent are aiming to invest 40-50 percent of their income in financial assets.

“We are witnessing a retail investing boom which is fueled by smaller towns and cities all over the country. Tech investing platforms, a strong regulator and the government's push for digitisation have unlocked the access to investing for thousands of retail investors all over the country,” says Harsh Jain, co-founder and COO of Groww.

Indians open to multiple equity investment avenues

Mutual funds are high on Indians’ priority list, which is not surprising given that their popularity has soared through the roof in the last few years. Investors are planning to increase their investments in mutual funds – a whopping 82 percent of respondents said they plan to invest through this route in 2022, as compared to 66.8 per cent in 2021.

In 2022, investors are keen to explore multiple investment avenues, the study found. Investors want to invest initial public offers (IPOs), cryptocurrency and even stocks listed on US stock exchanges. Over 60 percent of the respondents said they would like to explore initial public offers (IPOs). But investors should do their homework thoroughly before investing, say experts. “To make money in an IPO, choose stocks which are backed by sustainable business models, are fundamentally good and ask for digestible valuations,” says Mohit Nigam, Head, PMS, Hem Securities.

In the survey, 56 per cent investors mentioned that they plan to invest in information technology (IT) stocks. However, the raging bull market seems to have resulted in some investors getting carried away. Over 13 percent investors said they wanted to invest in penny stocks. This is a risky proposition as such stocks are not backed by strong fundamentals. They have low market capitalisation and are mostly illiquid on the exchanges. So, be sure of what you are getting into, as investing in penny stocks in akin to gambling, say financial advisors.

Gold, real estate investments through new-age avenues

Digital Gold and Real estate investment trust (REITs) too featured in the list of assets that Indians want to have in their portfolio. On investment in gold Pankaj Mathpal, Founder and Managing Director, Optima Money Managers says, “Though gold is not an ideal asset class for wealth creation, allocate some money to gold from a portfolio diversification point of view. It can bring stability to your portfolio in volatile phases of financial markets.

Investment outlook in 2022

When asked about their investment outlook for 2022, 51 per cent respondents said they would adopt an aggressive investing approach as against 49 per cent who said they would remain conservative. A majority are anticipating a steady or a bullish stock market ride until June 2022, with only 11.2 per cent foreseeing a bearish phase.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
first published: Feb 21, 2022 09:47 am
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