The past five years have witnessed a seismic shift in the investment landscape in India, marked by an unprecedented surge in retail investors. This rise is particularly pronounced among young investors who lack financial literacy and education. To put it in perspective, the number of active demat accounts grew from 3 crore in 2017 to over 16 crores by June ’24. Today, retail investors account for approximately 50% of the total trading volume on exchanges. While the growth of retail investors is commendable, it also poses huge risks for the market and investors in general.
THE RUSH HOUR
Demonetization, announced by the Indian government in November ’16, involved the withdrawal of high-denomination currency notes (₹500 and ₹1,000) from circulation. While its immediate impact was cash crunch, it also led to a shift towards alternative investment avenues, including the stock market.
This trend was further fuelled by the Covid-19 pandemic. Lockdowns and the work-from-home culture provided individuals with more time to explore investment opportunities. As a result, the number of retail investors in India surged from around 11 million before March ’20 to approximately 25 million by early 2023. Many new investors, particularly the young, took the plunge into the stock market.
Furthermore, the digital revolution in India has played a pivotal role in democratizing access to the stock market. The proliferation of user-friendly mobile trading apps has made it easier for individuals to invest directly in stocks and mutual funds. A survey indicated that around 27% of Indian millennials now consider investing in the stock market as a viable option, compared to just 8% five years ago.
Another important factor was the decline in interest rates on traditional savings instruments, which prompted investors to seek higher returns in the stock market, including equities and mutual funds, to grow their wealth.
هذه القصة مأخوذة من طبعة August 2024 من Beyond Market.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة August 2024 من Beyond Market.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
THE REEL GAMECHANGER
AI is streamlining filmmaking - faster cuts, lower costs, and no drama (except on screen)
DODGING DIPS, CHASING PEAKS
MULTI-ASSET ALLOCATION FUNDS JUGGLE RISK AND REWARD, KEEPING PORTFOLIOS STEADY WHEN MARKETS WOBBLE AND SEIZING GAINS WHEN THEY RISE
MARGIN OF SAFETY: A SHIELD AGAINST MARKET MADNESS
Seth Klarman's Margin of Safety is a masterclass in investing wisely, where patience, independent thinking, and a margin of safety shield investors from market mayhem
BUDGET'S CONSUMPTION PIVOT
The Union Budget FY26 has set the stage for a transition from state-driven infrastructure spending to a model where rising household consumption would kick-start private capex cycle
MOUNTING CHALLENGES
India's economic momentum is slowing due to various factors, leading to a revision of growth estimates by IMF
IMPORTANT JARGON
A PRE-LISTING TRADING PLATFORM IN WORKS TO CURB GREY MARKET
CRACKING THE CREDIT SCORE CODE
Understanding how lenders decode credit scores can help shape loan terms and pave the way for smarter financial decisions
HYPE, HOPE, OR A SOLID BET?
NFOs open new investment opportunities, but careful evaluation is key to ensuring they align with both financial goals and market realities
SHRINKING MARGINS, RISING PRESSURES
Banks grapple with shrinking margins, deposit pressures, and lending shifts as the RBI resets interest rates
CLEAN WATER MEANS BIG BUSINESS
India's water treatment industry is making waves on the back of tighter regulations, green goals, and a growing thirst for wastewater recycling and ZLD solutions
