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A fifth of Indian households are now linked to the stock markets, as the total market capitalisation of Indian companies has grown six times over the last decade, says a report by National Stock Exchange.
The report highlighted that the number of accounts linked to stock market investments has crossed 21 crore, with over 18 crore demat accounts. Notably, the last two crore investors joined in just over five months for each crore. The year 2024 alone saw 2.32 crore new investors, the highest ever in a single year. It said "A fifth of Indian households have a link to the markets, today, as the market capitalisation of Indian companies has increased 6x in this period". The report also highlighted significant wealth creation for Indian households through stock market investments. It stated that the household wealth in Indian equities has increased by over Rs 40 lakh crore in the last five years and by over Rs 28 lakh crore in the last three years. In 2024 alone, household investors saw a wealth gain of Rs 13.2 lakh crore. The wealth estimation is based on the annual change in individual holdings in NSE-listed companies, both through direct stock investments and mutual funds. NSE said "the household wealth in Indian equities has increased by over Rs 40 lakh crore in the last five years, and over Rs 28 lakh crore in the last three years". The report assumed that individuals hold the same proportion of mutual fund investments as they do in equity assets under management (AUM). Despite market ups and downs, Indian investors continue to show confidence in stock markets. NSE stated that as of September 2024, individual investors directly and indirectly own 17.6 per cent of the Indian stock market, a significant jump from previous years. This is nearly equal to the share of foreign portfolio investors (FPIs), which was 7.1 percentage points higher than individual holdings in FY21. The report further noted that while FPIs have been withdrawing funds, strong domestic inflows have kept the market stable. The participation of Indian households in equities is expected to grow further as more investors enter the market and wealth creation continues. (ANI)
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