Risk-averse India: Only 1 in 10 invest in securities despite awareness

Only 10 per cent of Indian households invest in securities, despite 63 per cent being aware of at least one market product, according to a nationwide investor survey released by the Securities and Exchange Board of India (Sebi) on Tuesday.

The survey, conducted with AMFI and market infrastructure institutions including NSE, BSE, NSDL and CDSL, covered over 90,000 households across 400 cities and 1,000 villages, making it one of the largest of its kind.

Research firm Kantar executed the study, which examined investors, non-investors, lapsers, intenders, and intermediaries to paint a holistic picture of India’s investment landscape.

Participation in securities remains heavily skewed toward urban households. While 15 per cent of urban households reported investing in securities, only 6 per cent of rural households do so. Among states, Delhi led with 20.7 per cent household participation, followed by Gujarat at 15.4 per cent.

Despite this gap, Sebi highlighted that 22 per cent of non-investors aware of securities products intend to invest within the next year.

The report flagged that only 36 per cent of current investors possess moderate knowledge of securities markets. Complexity of financial products, fear of losses, lack of trust, and limited financial literacy were identified as the primary barriers to broader participation.

Even among Gen-Z households, typically expected to be risk-taking, 79 per cent displayed risk-averse behaviour, preferring capital preservation over chasing higher returns.

The Securities and Exchange Board of India (Sebi) said the survey was undertaken against the backdrop of rising investor participation and the expanding role of India's securities market in mobilising and allocating funds.

The survey's objectives were to assess current penetration and awareness levels, identify barriers and motivators for investors and non-investors and evaluate the effectiveness of investor education and grievance redressal mechanisms.

Sebi said the findings would help frame strategies aimed at promoting responsible investing and make India's securities markets more inclusive.