In the history of the Indian stock market, a golden chapter is being written in 2024. The Bombay Stock Exchange (BSE) has witnessed the participation of nearly 164 million retail investors so far. This figure not only represents a number but also signifies a significant change in the ways of investment and wealth creation in India.
Previously, the stock market was considered the domain of a few select individuals, but now, technology has made it accessible even to the common man. Through mobile apps and online platforms, people from towns and cities alike are stepping into the stock market. They are not only driven by the desire to secure a better future for themselves but also contribute significantly to the country’s development.
Let’s understand the reasons behind the increasing participation of retail investors in the Indian stock market and the changes it is bringing about.
What’s Happening?
In recent years, there has been significant growth in the participation of retail investors in the Indian stock market. This growth has been inspired by several factors, including increased awareness about finance among people, the convenience of buying or selling any listed stock with just a click thanks to technology, easy account opening through KYC processes, and a gradual increase in risk-taking ability among people.
Earlier, saving in Indian households mainly meant bank accounts, FDs, and PPFs, which essentially offered low risk and low returns. But now, the narrative is changing. Today’s common man is investing in mutual funds, stocks, and bonds to grow their money.
According to the Economic Times, more than 120 million new investors registered between 2019 and 2023, and in January 2024 alone, over 5.4 million new investors entered the market.
Rising trend of SIPs and Bonds
According to the Association of Mutual Funds in India (AMFI), by January 31, 2024, there were more than 79.2 million active SIP accounts across India. Not only that but in January 2024 alone, a record-breaking amount of Rs 18,838 crore was invested through SIPs, marking a growth of 36% compared to January 2023.
According to Money Control, the participation of retail investors on online bond platforms is rapidly increasing. In this financial year, retail investors on online bond platforms have become 30-40% more active than before, and not only that, the total amount invested by these investors has also increased by 60-80%.
What Impact has this had on the Market?
According to Business Today, the Indian stock market performed better in 2023, with Nifty 50 and Sensex ending the year with approximately 20% growth. This is the second year of the best performance since 2017, and during 2023, Indian indices were included in the world’s fastest-growing indices on a global level.
During 2023, Nifty 50 gained 3,600 points throughout the year and crossed the 21,800 mark. Similarly, Sensex also created history by crossing the 72,000 mark with a gain of 11,000 points. Not only has this rapid growth contributed to a good economy, FII flow, mutual fund inflow, and better corporate growth, but retail investors have also played a significant role.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not investment advice.
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