Retail investor participation in Indian capital markets sees a surge in FY26: Economic Survey

Retail participation in the capital markets has seen a significant increase in FY26, as evidenced by rise in demat accounts and investor numbers, sustaining the momentum in financialising savings from traditional channel to formal financial assets, the Economic Survey for FY26 said. “Stable macroeconomic fundamentals, corporate earnings prospects, technological innovations enabling seamless investor onboarding monetary management and financial intermediation through simplified KYC processes and strong regulatory oversight have collectively contributed to this expansion,” it said. The Survey noted that although net additions to the investor base moderated in the current fiscal, net inflows of domestic investors into equity markets remained resilient. “Over the past five years, cumulative inflows by domestic investors into the equity markets have been substantially higher than from foreign investors. This shift highlights the increasing ability of domestic savings to support equity markets, stabilise the market, and mitigate the volatility associated with external capital flows,” it said. In the first nine months of the current fiscal, 2.35 crore demat accounts were added pushing the total count beyond 21.6 crore, while the number of unique investors has crossed the 12 crore mark. The Survey noted there has been a gradual but persist movement in household savings to market-linked instruments, particularly equities, which reflected both structural changes in the financial system and evolving household risk preferences. “Equity investments, which were once ancillary to household balance sheets, have increasingly become a significant component of financial wealth, supported by broader participation and more diversified channels of access.” The share of individual investors in equities rose to 18.8 per cent by September 2025 from 14.3 per cent in FY19, while in absolute terms individual equity holdings has expanded over 10 times to ₹84 lakh crore as of September from FY14. Retail engagement with corporate bonds and debt-oriented investment products were limited, due to lack of depth in the bonds market. “India’s households have embraced equities; extending that confidence to debt markets is the next frontier for building truly resilient portfolios and a mature financial system,” it added. Published on January 29, 2026