STOCK MARKETS THE NEW BULLS

MILLIONS OF BOLD AND FINANCIALLY SAVVY SMALL INVESTORS ARE SHORING UP INDIA'S BOURSES

- ANILESH S. MAHAJAN | Illustration by NILANJAN DAS / AI

Lunchbreaks are when Anjali Mehta, a 29-year-old schoolteacher in Kanpur, finds time to think about her investments. She checks the latest options on her cell phone and recently earmarked Rs 5,000 for her fifth contribution to a mutual fund this year. The amount was small. But the decision was anything but casual. “I consider these investments as my future,” she says. “Banks give nothing, gold is too slow. The stock market is where the real action is.”

Anjali is not an exception. She's part of a fast-growing tribe of middle-class Indians who are rewriting the rules of personal finance and, in the process, changing the face of India’s resilient stock market. In the past five years, India has witnessed a quiet revolution in household investing, with the number of dematerialised or demat accounts (where share certificates are stored electronically) opened by small investors seeing a near-five-fold increase. They rose from 41 million in FY20 to 192 million by FY25 with a phenomenal CAGR (compound annual growth rate) of 35 per cent. Of these, an estimated 75 per cent were for retail participation alone, with the remaining dominated by institutional investors.

India’s mutual fund industry, which is the favoured option, is riding an unprecedented wave. The total assets under management (AUM) in the industry stood at Rs 74.4 lakh crore by the end of Q1FY26. This is nearly thrice the Rs 25.5 lakh crore just five years earlier. Small investors accounted for 28 per cent of the AUMs in FY25, up from 20 per cent a decade ago. Along with high net-worth individuals (HNIs), they together constitute 63 per cent of the total AUMs.