Young Investors Drive Equity Boom, Allocating Over 70% Portfolio to Stocks

Retail Frenzy in Equities as First-Time Investors Take Bold Bets

A new StockGro survey of 50,000 participants has revealed a significant surge in first-time investors with high risk appetite, allocating over 70% of their portfolio to equities. This shift underscores a growing preference for equities over traditional investments, particularly among young investors below 30 years of age.

• 45% of young investors prioritize equities as their main investment choice.
• Retail participation in equities has doubled since the pandemic.
• 42% of investors focus on long-term wealth creation.
• 32% seek passive income from their investments.

Surge in Retail Participation Amid Financial Awareness

The rise of financial literacy initiatives, digital trading platforms, and innovative investment products has fueled this trend. According to the survey:

• Stock market accessibility has improved, with platforms like NSE Now and BSE Star making investing easier.
• Financial education programs from BSE’s Investor Protection Fund and NSE’s investor service centers are helping investors in smaller towns.
• Alternative investments like ETFs, derivatives, and index funds are gaining popularity among new investors.

Explosive Growth in Mutual Funds and Alternative Investments

The survey also highlighted a threefold rise in mutual fund AUMs (Assets Under Management) since the pandemic, now at ₹67 lakh crore.

Additionally, alternative investment options such as Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) have gained traction.

• REITs grew 31% YoY in 2023, reflecting growing investor confidence.
• 80% of respondents monitor stock trends regularly, with 69% checking daily and 22% a few times a month.
• 41% of prospective investors still prefer bank deposits, showing a continued reliance on low-risk, low-yield assets.

Equity Culture Expanding Post-COVID

India’s demat accounts crossed 10 crore, marking a new milestone in retail participation. The country’s stock market, which grew at a 9% CAGR from FY95-20, saw a 26% CAGR from FY20-24, with 25% growth in FY23-24 alone.

“Retail investors are becoming more confident, shifting from traditional savings to high-yield investments,” the report noted.

Women Investors on the Rise, But Confidence Gap Persists

The democratization of investing has led to a rise in women investors, with female registrations increasing from 22.6% in FY22 to 23.9% in FY24.

• 63% of women have received some financial education, but only 23% feel highly confident in stock investing.
• 30% of women with a Master’s degree or higher show greater inclination to invest.
• However, cultural and economic barriers persist, with many women preferring gold, silver, and real estate over stocks.
• Workforce participation among women remains at 33%, far below the global average of 50%, contributing to a ‘gender investment gap.’

India’s Evolving Investment Culture: A Dual Reality

Between 2013 and 2024, the equity exposure of Indian retail investors rose from 2.2% to 5.8%, yet equities still form less than 5% of total household assets.

The survey found:

• 93% of respondents track the stock market, but only 81% actively invest.
• The primary barriers to investing include lack of knowledge, cash constraints, and risk aversion.

Future Outlook: Expanding Retail Participation in Equities

With a strong push towards financial literacy, digital accessibility, and innovative investment products, India’s retail investment landscape is poised for further growth.

“While younger investors embrace equities, traditional savers remain cautious, shaping a dynamic investment culture in India,” StockGro concluded.

As retail investors continue to drive equity markets, the focus will be on bridging the knowledge gap and ensuring sustainable financial growth for all segments of the population.