The Indian equity and bond market has seen a tremendous shift over time. With its strong economic expansion, rising disposable income, and the advent of technology propelled platforms, the whole financial ecosystem is seeing an upsurge in investing. This has resulted in a considerable growth in the number of capital market investors, changing India from a ‘saver’ to ‘investor’ nation.
The National Stock Exchange of India (NSE) just overtook Hong Kong stock exchange to become the world’s fourth largest exchange, and it has had exceptional development, doubling in value during the last four years and exceeding a market capitalization of $4 trillion by the end of 2023.
According to statistics published by the National Stock Exchange (NSE), the overall number of individuals who are directly engaging in the Indian stock market has climbed above 8 crore for the first time, with the most recent 1 crore adds taking place in just over eight months. This 8 crore distinct investors equate to about 5 crore unique families in India (or around 17% of households) that participate directly in the Indian stock market through the NSE’s broad countrywide group of trading participants.
The above is just only NSE exchange’s data. Another interesting fact is that of the 3.7 crore new investors added in FY’24, approximately 45% are from tier-2 and tier-3 cities, which are outside the top 100 cities. As at the end of March-2024, there were 15.4 crore demat accounts with the two depositories, NSDL and CSDL, representing a 32.3% growth year on year. Because investors can have several demat accounts, the total number of demat accounts is usually increasing.
Despite India’s population of 1.4 billion, reach of Indian stock market awareness remains quite low at roughly 5-6 percent, indicating that there is tremendous opportunity in the Indian capital market in the future.
The key cause of the recent increase in the participation of Indians in direct equities is the Indian growth narrative, which has drawn many young Indians to the capital markets. As previously stated, the regulator’s push for digitalization and the implementation of e-KYC has also aided in the digital registration of clients, eliminating the need for cumbersome paperwork. India has enormous potential to become the world’s largest capital market, and technology will play an important part in that path.
